Professional fees in PAYE self assessment

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Afternoon,
I have a client who worked (was a director and is a shareholder) within their family run company with siblings, they were subject to harassment, bullying and just disgusting behaviour from the other directors/shareholders of the company. 
My client took the company to court, they received a payment of their full year salary in order for my client to leave the company. 

Client has had to pay court fees etc in the process, can they offset this in their personal tax return?

Replies (7)

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By Paul Crowley
11th Apr 2024 18:44

What exactly did the court order?
I would have expected compensation, not a payment of wages under PAYE.

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Replying to Paul Crowley:
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By FactChecker
11th Apr 2024 19:04

Suspect that 'court' is a mis-naming of Employment Tribunal (who *might* well have found a case of constructive dismissal and ordered that payment).

Might - but we don't know (along with almost everything else needed to give a reliable answer ... and that wouldn't be the kind of info to post on a public forum).

But I agree - my starting point would be what does the Order actually say (issued by / reason for order / amount and type of payment / etc). Without that we don't even know if it is subject to PAYE or is redundancy or compensation for loss of office or ...

[We also don't know what, if anything, else was ordered - or depending on the type of 'court' has yet to be heard elsewhere - with regard to her shareholding.]

OP: On what basis do *you* think that "court fees etc" would be an allowable deduction on their personal tax return (and against what tax)?

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Replying to FactChecker:
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By Kashaccounting
12th Apr 2024 07:04

Iv just done some further digging.
It went to a tribunal, so my client paid solicitor fees to help her with the case against the company

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By taxdigital
12th Apr 2024 07:22

As a tax advisor let’s start with your view first. We could all then help you.

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By Matrix
12th Apr 2024 07:39

Maybe they should ask for a refund if the counsel weren’t able to recover the fees as part of the settlement which is being taxed as wages.

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By Truthsayer
12th Apr 2024 09:26

The fees were not incurred in the course of their duties. They were incurred in obtaining payment for their duties, and I am not aware of any statute or case law that supports a deduction under Schedule E in that case. I therefore doubt it is deductible.

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By JCresswellTax
12th Apr 2024 14:04

No

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