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Post Info TOPIC: Compensation from a court case and the expenses that are incurred for solicitors cost.
Vicki Newman


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Compensation from a court case and the expenses that are incurred for solicitors cost.
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Hello,

I have a client who is going through legal proceedings, If she is successful she will be due a large payout.

She has paid out a huge amount of money in solicitor bills which she would like to deduct as an allowable expense, is this OK to do?

Also, when she does receive a payout how will I account for the compensation, will it be chargeable to income tax or should it be accounted as a chargeable gain?

Thank you in advance 

Vicki

 

 

 

 



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Cheshire


Master Book-keeper

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You've not said what the compo for so hard to say without more info

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Vicki Newman


Senior Member

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Posts: 117
Date:
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Hello Joanne,

Sorry I should have elaborated, it's for a defamation claim.

Any advice gratefully received.

Thanks

Vicki

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Cheshire


Master Book-keeper

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Posts: 8646
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Hi Vicki
This isnt my area at all, so I cannot advise - I was hoping to open up your question a little. Is the defamation purely a personal matter or in their capacity as a business. Even if its the latter, its not always straightforward and could be affected by the deal that the solicitor working on the case is agreeing. Someone advising this would need to know a lot more, but I would suggest a tax advisor/Accountant is involved in the mix here.

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Vicki Newman


Senior Member

Status: Offline
Posts: 117
Date:
Permalink Closed

Thank you Joanne. I think I might give someone a call that might have some experience in this. Fingers crossed hey!

Vicki

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