Restrictive covenants: consideration taxable as general earnings
Section 225 ITEPA 2003
Treatment of payments for entering into restrictive covenants
Payments made for entering into restrictive covenants or undertakings are treated as general earnings (see EIM00511). The employee or office holder is taxed on the whole amount received in the year of assessment. As earnings, the consideration is chargeable only if it falls within the scope of the Sections set out in EIM03601.