In Krishna Moorthy v HMRC ([2014] UKFTT 834 – 21 August 2014) the FTT found that a payment had been made to an employee in connection with the termination of his employment.
Mr Moorthy had been made redundant and had received £200 000 under a compromise agreement. He contended that this amount was not taxable as it had been paid to settle a discrimination claim to compensate him for not being selected for a post and to protect his employer’s reputation.
The FTT observed that ITEPA s 401 which brings into charge a payment ‘directly or indirectly in consideration or in consequence of or otherwise in connection with the termination of a person’s employment’ is widely drawn.
The FTT found that the alleged discrimination unfair dismissal and ‘injury to feelings’ were all connected to the redundancy which had come as a ‘shock’ to Mr...
