Thanks to respond, much appreciated
My answer is a careful reviewed technical answer (I never do things as standard!! or people would pay too little tax or not enough , which would defeat the object of my current accountancy and tax consultant position and make a mockery of me charging them fees advise I give! )
The issue here is that you were to be sacked dismissal and so as if it was you in breach on contract (in essence) this payment was made under those terms - and whilst I full appreciate the terrible price you have paid in view of the fact you have been cleared of any wrong doing, as you got your licence back,
HMRC can ONLY deal with the facts as they were at that time (mores the pity) Now you advise this was in recognition of the lost bonus, as they were going to sack you should you not accept the payout ,its even more a position of a payment liable to tax.
Buts all PILONS - are paid to suggest/indicate that an employee is NOT required to work notice and goes with immediate affect and the payment made in compensation of that legal entitlement. Even if your employment contract stated that you only had to work a months notice, the fact the payment was made instead of the bonus, instead of being sacked - and it was called PILON and not compensation - all amount to why all the payment was liable to tax and will remain so