Acas and settling before going to tribunal....

[Southwind]

Im asking on here coz its hard to get hold of my CAB representative..... i have just accepted an offer from my employer and was wondering if when i receive the payment do i have to declare the payment to the nice tax people or not ???

TIA

What is the offer payment actually for? Is it to compensate you for loss of earnings?

Depends on how much the payment is and what it's for. Most taxable payments will be taxed by your employer before paying it over though.

Can you give some more details? When you agree a settlement, it should be clear if it's net or gross (or tax free, as some payments can be).

Oh OK, It is for £4000.

I will see what the form I have to sign states the payment is for, when I receive it.

The lady at CAB only ever refers to it as "settlement amount" or "payment" although I think she once said injury to feelings. I had a case for three counts of sexual discrimination (pregnancy)

Thanks

Right, well the big question is is it:

1. Money you think you were owed anyway: holiday paid, notice money, a bonus they never paid you, that kind of thing?

1. Compensation: i.e. there's no specific money they owed you, but this is to compensate for their behaviour.

The latter will be tax free up to £30,000 (above that, for really big settlements, it's taxed). The former will normally be taxable (there's a slight complication on notice pay, which I'll explain if you say it's notice pay!).

The COT3 form (which is the form ACAS send you) should make it clear what the tax status of the money is. If it doesn't, call the ACAS rep and ask for the wording to be clearer.