Financial loss allowance, sometimes called a payment for loss of
earnings, is paid to members of various public bodies such as those
in the National Health Service. Such payments are also made to
magistrates and persons on jury service.
Provided that the payment is calculated to do no more than
replace the salary that the recipient would otherwise have received
from their employer, a financial loss allowance is not taxable as
employment income. However, if the recipient is self-employed the
allowance is taxable as Trading Income as a receipt of the
business. See also BIM40475.
