tax treatment employee legal fees

costs of protective covenant

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A company takes on 3 employees.

Their previous employer sues then for breach of protective covenant

The new employer pays the legal fees

 

What's the tax treatment

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Portia profile image
By Portia Nina Levin
10th Dec 2016 13:03

Dr Legal fees, Cr Bank.

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By Accountant A
10th Dec 2016 15:44

The tax treatment is the same as it would have been if the company had bought the employee his weekly groceries.

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RLI
By lionofludesch
10th Dec 2016 17:57

Is this the company's previous employee ?

Fogged .....

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By Democratus
14th Dec 2016 08:58

Which taxes

P11D would involve Class 1A (i know we are told it's not a tax but it is). P11D would include any VAT from legal team.

Is VAT recoverable ???? Another tax issue.

Then: is the cost allowable for CT?

Are these the questions?

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