Thank you for your reply
Can you please explain to be or let me know what kind of damages are non taxable?
The compensation I received following COT3 agreement doesn’t specifically state it is for damages but sates it is to terminate the employment contract and for me to drop all the cases against my former employer.
It also states
For the avoidance of doubt, the settlement figure includes the sum of £9,203.16 which represents the maximum figure payable for statutory maternity pay to which the Claimant would have been entitled had she remained in employment with the Respondent
Therefore, I am concerned that HRMC will regard it as earnings or income or replacement for lost future income.
I understand if the settlement ( compensation) is related to termination of employment , first £ 30k is exempt from tax but rest is subject to income tax and/or NIC ( possibly) but my case is complicated as I had made claims for Injury to feelings and aggravated damages due to ill health I suffered.
Hence I would really appreciate it if you can give me some advice on how I can explained to HMRC what categories my case sits under so my compensation is not subject to full NIC and income and I have better understanding of my case for tax purposes when I go to HMRC tax office.
Please do not hesitate to contact me if you have any questions
Thank you for your help with the matter