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Tax on termination: Contractual pay in lieu of notice liable to income tax

This report relates to 1 case(s)

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    EMI Group Electronics Ltd v Coldicott (HM Inspector of Taxes) [1997] STC 1372 HC (0 other reports)

In EMI Group Electronics Ltd v Coldicott (HM Inspector of Taxes) 22.10.97 High Court, the High Court rules that a payment in lieu of notice paid under an express contractual provision is an emolument "from" the employment, and therefore liable to income tax in full under Schedule E.

Income tax is payable under s.19 and Schedule E of the Income and Corporation Taxes Act 1988 (the ICTA) on any "emolument" from employment. The exact wording of s.19(1) is: "Tax under [Schedule E] shall be charged in respect of any office or employment on emoluments therefrom .