When a claim for personal injury is successfully settled, the compensation that you are entitled to will be paid to you. So what is the situation with regard to paying tax on this compensation?This is a question that we get asked a lot, which if you’ve ever had many dealings with the HMRC and the UK’s complex tax system, is not surprising!

The amount of compensation awarded depends on the specific circumstances of each individual claim. Amounts can vary from a few thousand pounds for, say a whiplash claim where compensation amounts are reasonably standardised, through to millions of pounds for complex, serious and massively life-changing injuries. We are happy to provide guidance on the likely level of compensation prior to starting to make a claim.

Personal injury compensation can be awarded as a lump sum or as periodic payment, or it can be a combination of the two. Compensation can be awarded as a result of a Court judgement or, if the case is settled beforehand as most cases are, through an out of court settlement. However your compensation is paid, UK law states that such awards and damages are exempt from tax. This also includes any interest on the settlement (which for larger amounts can be very significant), calculated from the date of the injury.

To find out more about personal injury compensation for all types of claim, contact one of our knowledgeable and friendly team today on 0800 160 1296. We offer a No Win No Fee service, this means that should your claim fail you will not have to pay a penny.