Is compensation to tenant allowable?

JodieR

Client rented out a flat (£325 per month) and had endless bother from the tenant. By the time he was evicted he owed 6 months rent and had caused £4k worth of damage to the property. Turns out the initial deposit from the tenant hadn't been placed in the deposit protection scheme (client thought that the agency had done this but it was her responsibility). So, the tenant found out that his deposit wasn't correctly protected and tried sueing my client. They agreed an out of court settlement which resulted in my client paying him £560 and £250 in solicitors fees. Please can someone tell me that there's a small silver lining to this very sad tale and that the £560 and £250 are allowable in her rental accounts? I'm thinking that they're probably not but struggling to find out for sure.

T.C.

Generally if an expense results from "law breaking", then it is not allowable. So my first instinct would be NO.