Compensation for injuries at work

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

Introduction

If an employee is injured as a result of something that happens at work then, in certain circumstances, compensation payments can be made to them which have no income tax, NIC or reporting requirements.

Issues regarding compensation payments for injuries suffered at work are covered in EIM06450 where these payments are referred to as ‘injury payments’.

Compensation payments

Lump sums

A lump sum paid to an employee due to an injury at work is not subject to tax or NIC as it is not caught by the legislation. It does not come under ITEPA 2003, s 62 as it is not earnings and nor is it within the definition of a termination payment under ITEPA 2003, s 403. There are no income tax, NIC or reporting requirements associated with compensation payments for injuries suffered at work as long as all the following requirements are satisfied. If any of these are not satisfied, then they will bring the payment into a charge under the legislation:

•
the payment to the employee is of the same nature and

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Trusts and Inheritance Tax

Transfer of assets to beneficiaries ― legal, administration and tax issues

Transfer of assets to beneficiaries ― legal, administration and tax issuesThis guidance note outlines how assets are transferred to beneficiaries and the tax consequences that flow from the transfer. Whether a payment is income or capital is discussed in the Payments to trust beneficiaries guidance

14 Jul 2020 13:52 | Produced by Tolley Read more

Trusts and Inheritance Tax

Gifts out of surplus income

Gifts out of surplus incomeA valuable exemption from inheritance tax (IHT) applies to gifts out of surplus income. This exemption applies only to lifetime gifts and is therefore a key part of lifetime planning. The exemption applies to both outright gifts and gifts into trust. Gifts which meet the

14 Jul 2020 11:48 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Corporation Tax

Indexation allowance and rebasing

Indexation allowance and rebasingThis guidance note explains the general rules surrounding the availability of indexation allowance (which was frozen at December 2017) on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview

14 Jul 2020 11:59 | Produced by Tolley in association with Jackie Barker of Wells Associates Read more

UU��ֱ��