Marc Gander - The Consumer Survival Handbook


A 220 page introduction to all things consumer related by our own BankFodder.

Includes energy companies, mobile phone providers, retailers, banks, insurance companies,debt collection agencies, reclaim companies, secondhand car sellers, cowboy garages, cowboy builders and all the rest who put their own profits before you.

£6.99



Patricia Pearl - Small Claims Procedure - A Practical Guide


An excellent guide for the layperson in how to use the County Court - a must if you are intending to start a claim.

£19.99 + £1.50 (P&P)


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  1. #21
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    chaoticj Novitiate



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    Cagger since : Mar 2007
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    I've worked out the sums owed gross, what they would have been net (assuming received last tax year) and compared to what I've been offered - better off by 1,400.

    Looking into the tax implications online seems to suggest if they word right and say this is part of a compromise agreement and is damaged for breach of contract/unfair dismissal etc. in Full and finalicon settlement it makes it not taxable.

    Does anyone know whether this is correct? Seems a no brainer to accept but I don't want to get a nasty surprise and find myself liable to pay taxes etc. further down the line.


  2. #22
    Site Team steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered Authoritative steampowered's Avatar



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    Cagger since : Dec 2012
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    There is a bit of an old wive's tale going round that termination payments are exempt from tax. This is wrong (of course - otherwise people could just exempt themselves from tax by handling payments through settlement agreements rather than payroll).

    I am grossly oversimplifying here, but in general compensation for unfair dismissal up to 30k is exempt from tax and anything over than that is subject to income tax and NICs. Payment for owed wages/holiday pay etc. is subject to income tax and NICs (whether paid under a settlement agreement or not).

    Clearly, the employer is paying you owed salary/commission here. Not compensation for unfair dismissal. So it would be subject to tax if HMRC ever challenged it.

    In reality though, HMRC pursues the employer for failing to deduct tax from the payment. Not the employee. So as long as the settlement agreement does not contain a provision shifting the tax risk back onto you (for example a clause stating that you agree to pay any tax on the award), you should be OK. Just make sure it is very clear that the employer pays you gross and that there is nothing in the settlement agreement which says you must pay any tax.

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