Skip to main content

This is a new service – your feedback will help us to improve it.

  • New employer pulled out last minute, is Inconvenience compensation taxable?

    Hi, I need advice on the taxation. It is about the "Inconvenience Compensation" by the employer whom I interviewed with. The job was offered, agreed and contracts signed but the employer changed their mind before the date of job commencement and they retracted the offer and left me in middle of transition. The contract was signed over two months ago and after my multiple follow ups for months on asking for the start date, the employer eventually sent an apology email mentioning the decision to retract the offer of employment signed between us. They also mentioned this in exact words. "To compensate for the inconvenience, we will provide you with one months' notice pay as stated in your contract." Will this income be taxable? For his compensation, Do I expect the gross payment on offered salary or will they deduct the taxes? ls there any tax / self assessment that I need to do once I receive the payment? I was reading below linked page but not sure if that applies to my case. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13030 With my current salary, I am already a higher rate taxpayer.