Earlier this year the HMRC codified the tax concession (ESC A81) for legal fees on termination (see our March 2011 ebulletin).  The drafting appeared inadvertently to withdraw the concession where settlement is achieved through an Acas-conciliated COT3 rather than a statutory compromise agreement.  We understand that the HMRC has now indicated its intention to remedy the drafting if necessary and has confirmed that ESC A81 can continue to be relied on in the meantime to cover COT3s.


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Samantha Brown

Managing Partner, Employment, Pensions and Incentives, UK and EMEA, London

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Steve Bell

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