An Inspector must deal with any case where there is any doubt or
dispute about whether a particular receipt is taxable as earnings
within Section 62 ITEPA 2003.
It is mainly when non-recurring or voluntary money payments
are received by an employee, or former employee, that you will have
to consider the main principles set out at
EIM00510 to EIM00610. They are sometimes
referred to as lump sum payments.
The correct tax treatment can only be decided after all the
facts have been obtained. This often means getting copies of
relevant correspondence and documents, and interviewing the payer
and recipient. Factual matters not detailed in correspondence can
often be crucial. Remember too that the description of a payment
may be misleading. It may be described as a gift or compensation
but may still be taxable as earnings because it is from the
employment.
The following table shows you where to find guidance on the
treatment of particular types of lump sum payment. In each case,
the question is whether the payment comes from the office or
employment. In cases of doubt or difficulty, do not forget to
consider the general guidance on the point at
EIM00600 onwards.
| Guidance
| Circumstances
|
| EIM00630 | Contractual payments |
| EIM00640 | Customary payments |
| EIM00650 | Payment for not resigning, or for continuing to serve in the employment |
| EIM00660 | Payment for loss of rights |
| EIM00670 | Payment in lieu of remuneration |
| EIM00680 | Variation in duties or terms of employment |
| EIM00690 | Payment for restricting employee's freedom within the employment |
| EIM00700 | Inducement payments: golden hellos |
| EIM00710 | Payment for surrender of an asset, or for loss of a valuable right, on taking up employment |
| EIM00730 | Payment for additional duties |
| EIM00740 | Payments out of profit sharing schemes |
| EIM00750 | Compensation from a source other than the employment |
