BIM40135 | Specific receipts: compensation and damages: loss of office: in course of trade or profession

Compensation falling to be dealt with as employment income

Although income arising from offices or employment is sometimes included in arriving at the measure of trading profits (see EIM02500) such income is usually properly charged as employment income (see CIR v Brander & Cruickshank [1970] 46 TC 574).

It follows that, unless BIM40140 applies, compensation received in the course of such an office or employment or on its loss or termination should be considered in accordance with the employment income rules. See the instructions at EIM00620 onwards and, for termination payments, at EIM02500 onwards.