Readers' Forum
Replies to Queries — 1
A leaving card
Readers' Forum
Replies to Queries — 1
A leaving card
I have a client, a greetings card salesman, who has acted — over the past twenty-odd years — as a self-employed agent for a couple of dozen greeting card companies. Recently, some of the companies he represents have been changing to a system of employing their own agents and have accordingly dispensed with my client's services. In accordance with the Commercial Agents (Council Directive) Regulations SI 1993 No 3053, my client has become entitled to compensation for the loss of those accounts on the grounds, as the regulations say, that he had built them up for the companies. I am now wondering about the tax treatment.
The regulations speak of the sums to which a person is entitled in such circumstances as 'indemnity', so maybe there is an analogy to damages in a court case. In fact, the word damages is used in the Regulations. On the other hand, there could be an analogy with goodwill.
A third possibility might be to look at the rules for tax treatment of compensation for termination of a contract of employment; although, as I say, my client is not employed, but is a self-employed person with contracts framed accordingly.
I should be grateful for any pointers to relevant sections of the Taxes Acts. So far, I have found none.
(Query T16,512) — Sales Away.