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Do You Pay Tax on Personal Injury Compensation?
Claiming personal injury compensation can seem confusing at the best of times. ‘Is personal injury compensation taxable’ is another concern that can come after you have received your initial payout. We can help you to understand where you stand.
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What are Common Personal Injury Claims?
You can potentially claim for personal injury compensation if you have suffered due to the negligence of another person or institution, and personal injury compensation isn’t taxable.
There are a number of serious injuries that can be included in this definition. Incidents of personal injury can for example include:
- Accidents caused by criminal offences, like assault
- Accidents caused by the negligence of medical professionals
- Road traffic accident – whether you were in a vehicle or hit by a vehicle or bicycle
- Accidents caused by faulty goods or services
- Accidents that happen in the workplace
The compensation you can claim for will depend on a number of factors, and will keep in mind exactly how much the injury has affected you and will affect you in the future. For example if you are no longer to work in your chosen profession due to this injury. If you are wondering if your personal injury compensation is taxable, the answer is no. UK law states that compensation awarded as a result from a personal injury claim are free from tax.
What is the Personal Injury Claims Process?
There is a personal injury claims time limit, so it is always best to act as soon as possible after you have suffered from an accident. In personal injury claims cases, you must make a claim within 3 years of the accident.
If a child has suffered a personal injury, then they have 3 years from the year that they turn eighteen to enter into the personal injury claims process. As a parent of an injured child you may also make a claim on their behalf whilst they are still under 18 years of age.
Once you have contacted a personal injury solicitor, they can begin to build your case file with evidence from your incident. It is often best to seek legal advice as soon as possible, as the events will be clearest in your mind and there are more likely to be witnesses who can be interviewed.
The process will be two-fold and will involve first proving who is liable for your accident, before then deciding how much you are entitled to for your personal injury compensation.
Liability means finding who is most responsible for your avoidable accident. For instance, if your employer failed to provide you with personal protection equipment at work then they would clearly be held at fault.
How will my Personal Injury Compensation be Calculated?
There are a number of different factors that need to be considered when estimating how your personal injury compensation will be calculated. Some of these are:
- The cost of the medical treatment, such as physiotherapy or rehabilitation programmes, that you will have to receive
- The loss of earnings that you may have suffered from not being able to work
- The travel cost of getting to your medical appointments
Is Personal Injury Compensation Taxable?
Personal injury compensation isn’t taxable. The law in the UK states that compensation or damages that are awarded for personal injuries are free from tax. This also includes any interest from the date of the injury to the date that the settlement is agreed upon.
Get In Touch With Us to Claim Personal Injury Compensation
If you are wondering, Is personal injury compensation taxable, then you probably are considering making a claim. Our experience with personal injury claims means that we are well-equipped to help you earn compensation for your accident.
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