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Is personal injury compensation taxable in the UK?

Many people avoid making personal injury claims as they’ve heard news stories about personal injury compensation settlements being taxable in the UK. You could be eligible to receive compensation if you’ve been injured in an accident caused by somebody else, and there’s no reason why you should miss out on making a claim over tax worries. Provided it has been three years or less since your accident, Accident Advice Helpline could help you to make a claim for compensation.

Is personal injury compensation taxable in the UK?

The good news is that generally tax isn’t payable on personal injury settlements, and you could be entitled to compensation for your pain and suffering, as well as any financial losses you’ve suffered like loss of earnings.

Why is personal injury compensation not taxable in the UK?

The law states that compensation or damages for personal injury paid as a lump sum or over a period of time are exempt from tax in the UK. This means that if you receive a lump sum as a settlement, or if you receive regular payments over a period of time (to pay for care or medical treatment, for example), you won’t have to pay any tax on the sum you receive, regardless of whether you were awarded it by the court or in an out-of-court settlement. Most personal injury claims handled by us are settled out of court, and we are happy to offer no-obligation advice and answer any questions you have about whether or not personal injury compensation is taxable in the UK.

When might you have to pay tax on your settlement?

If you decide to invest a lump sum received as a personal injury settlement then you will be required to pay tax on any interest generated. You may also find you have to pay tax on any interest generated up to the time of a judgement awarded by a court on compensation or damages. The best way to find out whether or not your personal injury compensation is taxable in the UK is to get in touch with our expert advisors. We have over 16 years’ experience helping people to claim compensation, and our professional personal injury lawyers work on a no win no fee basis.

Get in touch to find out more

You shouldn’t let worries about tax put you off making a personal injury claim, and you certainly don’t need to worry about upfront legal fees, as we don’t charge any. Accident Advice Helpline is here to support you throughout the claims process and if you have been injured in an accident caused by somebody else then we’re here to make sure you get the compensation you are entitled to. You can get in touch with us at any time after your accident by calling our freephone helpline on 0800 689 5659. Or why not take the 30-second test™ on our website right now for an idea of how much compensation you could be entitled to?