Compensation - Is it Taxable?

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
Hi Everyone

Just a quick query as the sun is making me feel brain dead today. If an amount is awarded to someone as compensation for an accident, is it only the portion for lost of earnings that is taxable?

I think it is but a solictor is telling me that the whole amount (lost of earnings and general compensation) is not taxed at all.

I hope this makes sense!!

Thanks for any replys.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Compensation - Is it Taxable?

    Off the top of my head I believe that he is correct and it is all tax exempt. From memory it is because the loss of earnings element is based on take home pay.

    However like you I'm feeling a bit brain dead so that might not be a real 'memory'!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Compensation - Is it Taxable?

    Hi

    Thanks for that, makes sense with what he was saying now.

    Regards
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Compensation - Is it Taxable?

    the whole ammount is totally exempt

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