Is Compensation I Receive for a Work-Related Injury be Tax Deductible?

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    My employer has just paid me a substantial sum described as ‘damages’ to compensate me for an injury I received at work. Will this payment be taxable?

     

    Any payment to compensate for personal injury is not taxable. This applies whether the compensation is paid in one lump sum or as a series of periodic payments. Interest paid as part of the damages award is also tax free but interest paid because of the late payment of the award will be taxable

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