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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5147
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am preparing my tax return to 5 April 2016. During that

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I am preparing my tax return to 5 April 2016. During that year, I had a major problem with npower who had supplied gas and electric to my former home and made a complete mess of the bills. During the course of our ongoing arguments they credited my account with £200 (in amounts of £50, £50 and £100) in the hope I would accept this and settle their outstanding accounts. I refused to accept it and went to the Energy Ombudsman who found in my favour and awarded me a goodwill payment of £250. So in total I received £450 as credits against the outstanding balances I paid npower. My question therefore is should any of this be declared as my income and if so how should it be entered on my tax return.

Thank you for your question.

This is compensation payment awarded through Energy Ombudsman and it is out of scope of income tax.

You should not report it as income in your tax return.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.
Many thanks, ***** ***** hear. I see that this would apply to the £250 compensation awarded directly by the Ombudsman. Does it also apply to the credits given by npower before I went to the Ombudsman?

Thank you for your reply.

You don't have to report on your tax return any credits given by npower before you went to the Ombudsman.

I hope this is helpful. and other Tax Specialists are ready to help you

I thank you for accepting my answer.

Best wishes