Client took customer to court for non payment of debt. Customer was awkward - did not turn up for two hearings. Judge awarded judgement to client along with court costs and additional "costs" to recompense client for time taken off from business to attend twice. Judge apparently made a point of saying that this additional award was not taxable.
Is that correct, or this simply a form of compensation for loss of profit?
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Did he say non-taxable?..
... or free of tax. Free of tax means that if the payer has any obligation to deduct tax, the payment after tax deduction must be the amount ordered by the court.
I'd say it was a compensation for lost profits, and so taxable.
Thanks for that - that was what I thought.
My client was not that specific - are they ever - he just recalled the judge saying it was not taxable. The amount awarded was, I understand, £350, being calculated sinmply as 2 days at £175, and as far as I know this amount was simply added to the actual costs. I am unsure how the court could calculate a figure after tax anyway.
Thanks again