The First Tier Tax Tribunal’s decision in NVCS Ltd v (1) Commissioners for HMRC (2) Dare serves as an important reminder for employers and their advisers to carefully check the terms of a settlement agreement. D’s entitlement to SMP was £7825. D signed a COT3 settlement agreement, under the auspices of ACAS, providing for £10,000 compensation. D claimed that the SMP due had yet to be paid, but HMRC decided it had been included in the £10,000 compensation under the COT3 agreement. The FTTT disagreed. SMP was not specifically referred to in the COT3, D had accepted the offer believing she would be entitled to be paid SMP in addition to the £10,000 compensation payment and none of the evidence relating to the negotiations could be taken so as to imply a term into the COT3 agreement that the £10,000 compensation included D’s entitlement to SMP.

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