Deducting damages from employee pay - taken from net or gross?
I got asked this question yesterday, and i should probably know the answer, but it hasn't come up before in my short career and therefore intrigued me to find out for my own sake. I've looked all round google and HMRC docs to find the answer, but still cannot see it in black and white. So now i seek the help of accountingweb members.
If it had been agreed in the employment contract that damages incurred to equipment etc could be deducted from employee pay, would these be deducted from the gross or net figure?
I'm heavily lent toward it being deducted from the net, only because what i have learnt about pre tax deductions consists mainly of pensions and similar.
It makes sense that these expense are incurred for the purpose of the trade (IE wouldn't have been incurred anyway, required to get business back to operating as before) however i have also seen a case whereby other damages were not allowable as a pre tax deduction as it effectively shared the burden with society.
Maybe i have read to much into this now and have muddled my own thinking, so please can someone just clear this up and point me in the right direction.
- Goodwill gesture for providing work 396 11
- What would you do in this situation? 74 5
- Filing a P87 (professional fees) before year end. 117 2
- Recommendations for payroll/AE software? 594 13
- More HMRC on gov.uk 621 11
- Rollover relief - when does gain crystallise in this situation? 69 1
- Offshore company transferring assets to a UK individual. 338 14
- Interest Free Loan - Salay Sacrifice? 239 4
- Research and development - repayment timescale 215 5
- VAT reconciliation and VAT return on Sage 94 2
- Sole trader hid directorships. 373 6
- Halloween - do you celebrate it? 1,383 46
- Enquiry into tax return - how co-operative would you be? 290 5
- NOVA 548 1
- Clearing payments on account/ Sage 50 267 10
- Regional Development Grant 114 4
- Problem ex client...again.. 2,376 21
- Company car without a salary 221 2
- Charity donations 1,069 21
- Interest on HMRC contract settlement 144 2
- Bonus Bonds 389
- Insolvency and whistle blowing 376
- Transfer of funds into recently set up company 287
- TPR imposes first penalty notice fines 256
- Box 8 VAT Return - deposit payment 184
- Husband proposes to buy the car as Director unable to acess finance 170
- Finance Lease 155
- Company Car Lease 152
- Form 42 147
- Demerger Reserve 129