I was fired from my work after four years. The company offered to pay money that was classified as an ETP and coded as “O” and described as
“Three (3) months Total Remuneration, being payment of notice in lieu and an ex-gratia payment.”
This payment was made by the company to me.
I felt that was an unfair dismissal and started to take legal action. The company settled and made an additional payment as part of the settlement. They coded this extra payment also as a separate ETP amount coded R.
Both of these payments were made as a consequence of the same event – unfair dismissal.
As such, my view is that both payments should be coded R and I’ve asked the company to recode the first payment as R. If they had not made the initial payment prior to the start of legal action the entire money owed would have and should have been classified as R in my view.
The reason it makes a difference is that only O payments impact the whole-of-income cap and having the first amount coded as O results in a substantial tax increase for me.
I’ve asked the company to recode the initial O payment as R but they have declined to do so on the basis of the narrow description of what those payments were for (as described above) and not taking into account the fact that the background was unfair dismissal.
Questions:
1) Is my view correct that given that the company settled an unfair dismissal claim that all amounts due should be treated as if they were a result of unfair dismissal?
2) If they continue to refuse to recode the second payment, what should I do?
3) In the tax return web interface the amounts are prepopulated but there is a dorp down that lets me change the coding – presumably this either has no effect or I am not supposed to use it?
Please let me know if anything is unclear.
Many thanks in advance.
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