Compensation for injuries at work

Our expert team tell you everything you need to do about reporting compensation payments

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

Do you have to report compensation payments made to employees to HMRC?

According to HMRC’s rules, if your employee is injured at work and you pay them compensation as a result of their injury, you don’t need to report these payments to HMRC or pay additional tax or National Insurance as long as the following conditions apply:

  • The payment is in return for the employee’s agreement not to make a legal claim against you
  • You and the employee have discussed and negotiated an appropriate amount of compensation to be paid
  • You would have been required to make a similar compensation payment to a member of the public if they had suffered a similar injury at your business premises
  • The employee isn’t automatically entitled to the payment as a result of their employment contract.

As long as the above conditions apply to the compensation claim, you don’t need to report this as a benefit to HMRC. That is because HMRC doesn’t consider them to be earnings. However, if they do form part of the employment contract terms, they would be eligible under National Insurance purposes.

How can DSR Tax Claims help?

We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

This page was last updated on 06/11/2018.

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