How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4199
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Section 62 Tax Treatment

Customer Question

Hi all, I posted a question a little while ago concerning the tax treatment of my air traffic controller's loss of licence scheme lump sum payment. I would appreciate some information. To recap. I suffered suffered a mini stroke with an emergency hospital admittance. As a result, I have lost my medical licence to practice. My company operates a contractual loss of air traffic controller’s licence benefit scheme. This states that in the event of loss of licence resulting in termination of employment two years salary will be paid. The scheme is run by an insurer to which the company pays a premium. I am about to be terminated by my employer who has been excellent and ready to pay out the lump sum. I always believed that any payment made under the loss of licence scheme would be exempt of income tax and national insurance contributions due to the HMRC definition of disabilty. HMRC have written to my employers saying that the sum will be fully taxable under Section 62 I previously thought that I was the insured party on the loss of licence insurance policy used by my company. I have just seen a copy of the contract document and it is stated that my company is the insured party. The risk in the document is stated as “To cover the insured’s employees as detailed under “information” against Permanent Loss of Licence due to accident or illness all as more fully defined in the policy wording.” Could that make a difference in the taxation of the lump sum by HMRC as I am not the insured party? I just wondered if I could make HMRC look again at my situation. Could I argue that the payment is being made to me because of the disability caused by the mini-stroke and not because the payment is contractual. Could I argue that I should not be taxed under Section 62 since the loss of licence payment is not employment income, but income due purely to my disability? Thanks again

Submitted: 2 years ago.
Category: Tax
Customer: replied 2 years ago.
Relist: I still need help.
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question again.
I am of the opinion that you should challenge HMRC on the position, but use a local, trusted professional to handle your case. There is too much at stake here to try to go it alone. You need a solicitor well acquainted with revenue law to advise you.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.