LRD guides and handbook May 2015

Law at Work 2015

Chapter 10

Interest and tax

[ch 10: page 321]

If the sum awarded remains unpaid 42 days after the tribunal decision, interest is payable on amounts outstanding.

A compensation payment for unfair dismissal under a compromise agreement is tax free up to £30,000, even if the employee is reinstated, as long as it is genuinely compensation for loss of the job, rather than earnings or a payment for services (HM Inspector of Taxes v Clayton [2005] IRLR 108).