Specific receipts: compensation and damages: loss of office: in course of trade or profession
Compensation falling to be dealt with as employment income
Although income arising from offices or employment is sometimes, for convenience, included in arriving at the measure of trading profits (see ESM4040, EIM02500 and ESC A37; the National Insurance Contributions treatment is discussed in NIM12004 and NIM12005), such income is still properly charged as employment income (see CIR v Brander & Cruickshank  46 TC 574).
It follows that, unless BIM40140 applies, compensation received in the course of such an office or employment or on its loss or termination should be considered in accordance with the employment income rules. See the instructions at EIM00620 onwards and, for termination payments, at EIM02500 onwards.