Compensation Claim Costs

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T.C.
T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
in General accounting discussion
If a client has been taken to court for an employment tribunal and lost the case, can he claim the expenses for the court and solicitor fees and also the payment made to the claimant? Advice appreciated on this one!!

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  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Come on you clever people - someone must know!
  • sloshed
    sloshed Registered Posts: 100 Dedicated contributor 🦉
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    I would say they would be allowable as it has been incurred within the trade. (If he did not have the trade then he would not have employed them).

    However I seem to remember, from when studying ATT, that there may a restriction if the trade is not carrying on.

    Hope that is a starting point, maybe be worth looking at the manuals on HMRC website.
  • payrollpro
    payrollpro Registered Posts: 427 Dedicated contributor 🦉
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    I agree with sloshed, any award made by the tribunals and any costs incurred as a result, in my view, are the same as where the business incurs cost to defend any other claim made against it. The only exception is where a statutory penalty is imposed, for example if the client had failed to comply with an order of the tribunal and had been fined as a result.

    We cannot offset such penalties against profits but the award and legal fees are ordinary costs of business.

    Mind you I cannot find anything in the HMRC manuals covering it.
  • sabinanelke
    sabinanelke Registered Posts: 4 New contributor 🐸
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    Bim38525

    would that be of any support for payrollpro's answer:

    http://www.hmrc.gov.uk/manuals/bimmanual/BIM38525.htm
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Thank you!!!

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