Compromise agreement – settlement sum to be paid net of tax

In Barden v Commodities Research Unit International, the High Court held that a settlement sum of £1.35million should be paid net of income tax.

The claimant was the former CEO of the defendant company. On his retirement, he was to be paid a sum under a compromise agreement. An issue arose as to whether tax should be deducted from the payment to be made under the compromise agreement. The High Court held that the compromise agreement, properly construed, meant that the sum should be paid to the claimant net of any PAYE due from him as a result of the payment.

To read the judgment in full, please click here. Our expert guide on compromise agreements provides further information on compromise agreements and our bespoke service.

If you would like to discuss a compromise agreement matter, please contact our specialist Canary Wharf based employment lawyers today on 0207 956 8699 or email The employment lawyers at Rahman Lowe Solicitors regularly advise senior executives and employees on the terms and effect of compromise agreements and we have a track record of success in negotiating favourable terms for our clients.