Whistleblower’s interim payments

The taxpayer was an internal auditor based in London. She received an email in October 2009 terminating her employment.

She applied to the employment tribunal for interim relief on the ground she had been dismissed because she had made protected disclosures to her employer under Employment Rights Act 1996 s 43A.

The tribunal granted her application and ordered the employer pay her normal salary from the date of her dismissal until the settlement of her complaint.

The tribunal ruled in 2011 that the taxpayer had been dismissed unfairly and wrongfully. A settlement agreement was reached under which payments made to her as interim relief were taken to be the compensation.

The taxpayer claimed £30 000 of the payments should be exempt from tax under ITEPA 2003 s 403.

HMRC disagreed and the taxpayer appealed.

The First-tier Tribunal said the question was whether the interim relief order payments...