| Commentary

(i) Injured feelings

| Commentary

(i)     Injured feelings

Compensation for injured feelings (see EqA 2010 ss 119(1), 124(6)) arising from discrimination during employment is not generally taxable under the termination provisions, even if the employment comes to an end as a result of the discrimination, because the payment will not be 'in connection with' the termination. The Revenue conceded the non-taxability of such an award in relation to religious discrimination in Northern Ireland in Walker v Adams [2003] STC (SCD) 269. The discrimination there appears to have pre-dated termination of employment, so that the payment for injury to feelings was not 'in connection with' the termination of the employment (see 271d). It would generally be difficult to establish that a payment in respect of injury to feelings has the necessary connection with the termination of employment to bring it into charge under s 401. In Yorkshire Housing Ltd v Cuerden UKEAT/0397/09 (16 July 2010, unreported) the EAT correctly addressed the taxability of an award for injury to feelings by reference to what had actually happened. In that case, the relevant injury was caused by pre-termination conduct so the award lacked the necessary connection with termination of employment.

Where the compensation for 'injury to feelings', or 'injured feelings', is paid in connection with termination of the employment, the payment is prima facie within the charge to tax under the termination provisions, unless it attracts an exemption as having been paid in connection with injury to the employee under

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