Tax on Car insurance payout?

Honest John Back Room » Motoring discussion
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Sat 7 Feb 2004 14:04
Tax on Car insurance payout? - Gazbo
I just finally got a payout from an accident from my insurance company and was wondering if I have to pay tax on it or not. I am sure you don't pay tax on health insurance payouts but wanted to get some sort of answer regarding motor insurance payouts.

Thanks in advance for any advice received!!
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Sat 7 Feb 2004 14:06
Tax on Car insurance payout? - martint123
No tax.
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Sat 7 Feb 2004 15:14
Tax on Car insurance payout? - Mark (RLBS)
Indeed, no tax.
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Sun 8 Feb 2004 20:03
Tax on Car insurance payout? - Hugo {P}
No

Because it's in respect of losses you have endured, either through injury, (suffering or loss of work) or car etc.

You only pay tax on gains etc, and insurance payouts are not regarded as a gain, but as compansation for losses etc.

Hugo
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Sun 8 Feb 2004 22:37
Tax on Car insurance payout? - hxj

Sadly, in pedantic mode, it's not quite as simple as that. Any compensation for losses does need to be brought into account if they represent for example lost profits or if you could otherwise claim a tax deduction or capital allowances etc.

Personal injury claims are exempt, but only because any tax liability is already factored into the payment.
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Sun 8 Feb 2004 23:08
Tax on Car insurance payout? - Gazbo
Many thanks for your replies, what an excellent website. At least I will know what to do (roughly) when the tax return comes around instead of wading for hours through word intensive inland revenue helpsheets.

Cheers guys
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Mon 9 Feb 2004 09:12
Tax on Car insurance payout? - pdc {P}
Ssshhhh. Don't give Gordon and Teflon Tony ideas!
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