Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Here is the guidance from Mayo Wynne Baxter, Solicitors on the matter of taxation of compensation:
'Awards greater than £30,000
Where the combined sum of the Basic Award and Compensatory Award is greater than £30,000, the tribunal will have to add the sum that is deductible for tax back onto the award to cancel out the tax burden imposed on the employee. This is done by:
Awards greater than £68,400
There is no official guidance in cases where, if the employee’s net loss, once grossed up, exceeds the current maximum Compensatory Award of £68,400. The consensus however, is that the tribunal should award the maximum and the employer should deduct PAYE (at the appropriate percentage rate) on the excess over £30,000 before making the payment to the employee.'
The Tribunal should gross up the award so that you are not out of pocket from the award.
I do hope that you have found my reply of assistance.
Thank you for your support.