BIM40135 - Receipts: compensation & damages: loss of office: in course of trade or profession

Compensation falling to be dealt with as employment income

Although income arising from offices or employment is sometimes, for convenience, included in arriving at the measure of trading profits (see for example ESM4040 and ESCA37), such income is still properly charged as employment income (see CIR v Brander & Cruickshank [1970] 46TC574). It follows that (unless BIM40140 applies) compensation received in the course of such an office or employment or on its loss or termination should be considered in accordance with the instructions at EIM02500 onwards.