Is the Injury Pension
Tax-Free?
HMRC says police injury pension payments can be paid tax-free. Your ill-health or ordinary police pension is still taxable. That split changes the real value of the upper tier, especially for higher-rate taxpayers. Here is how it works, with worked figures.
Independent information, not advice · Sources checked 7 October 2026 · England and Wales unless stated
Yes, the injury pension can be paid tax-free. HMRC's Employment Income Manual (EIM75900) says payments from injury benefit schemes such as the police scheme can be paid tax-free, but where you also get an ill-health or other pension from the registered police pension scheme, that pension is taxable and only the reduced injury payment is tax-free. HMRC's pages do not say how the one-off injury gratuity is taxed, so we do not either: ask HMRC or a tax adviser.
Quick answer: what is taxed and what is not
| Payment | Tax position | Source |
|---|---|---|
| Injury pension (Police (Injury Benefit) Regulations 2006) | Can be paid tax-free | HMRC EIM75900 |
| Ill-health pension (1987, 2006 or 2015 scheme) | Taxable | HMRC EIM75900: the registered scheme pension is taxable |
| Ordinary or deferred police pension | Taxable | HMRC EIM75900 (sections 569 and 579A ITEPA 2003) |
| Injury gratuity (one-off lump sum) | Not stated in the HMRC pages we read. Ask HMRC or a tax adviser | Not specifically addressed in EIM75900 or EIM75080 |
| State Pension | Taxable | GOV.UK, Tax when you get a pension |
| Benefits such as IIDB, ESA, PIP, Universal Credit | Each has its own rules. Not covered here | Ask DWP or HMRC |
In plain terms: the part of your income that comes from the injury award's pension is treated by HMRC as tax-free compensation; the part that comes from your police pension is taxed like any other pension. Because the injury pension is reduced by three-quarters of the police pension, a change in one moves the other, and tax makes that trade uneven.
- The injury pension can be paid tax-free; the police pension is taxed.
- Compare options after tax: £1 more police pension costs 75p of tax-free injury pension while it is above nil.
- Nobody has confirmed the gratuity's tax treatment on the sources we read: ask HMRC or an adviser.
We use "band 1 to 4" on this page as shorthand for the four degrees of disablement in Schedule 3 (25% or less, over 25% to 50%, over 50% to 75%, over 75%). The regulations themselves speak of the degree of disablement. This page covers income tax for England, Wales and Northern Ireland rates; Scotland is noted separately.
What HMRC actually says
HMRC's Employment Income Manual is the guidance its own staff use. Page EIM75900 deals with public service pension payments. It says most public service pensions are taxable, but that "there are separate compensation and injury benefits schemes that can make tax-free payments in certain circumstances". On compensation schemes it says:
- payments from certain compensation or injury benefits schemes, "such as those for police and firefighters, can be paid tax-free", and are usually made where someone has been disabled by an injury at work;
- where a person also receives an ill-health or other pension from their registered pension scheme, the tax-free payment may be reduced by the amount of that pension; and
- "in these circumstances the amount payable from the registered pension scheme is taxable and only the reduced amount payable from the compensation scheme is tax-free".
That description fits the police injury award closely. Your injury pension is a guarantee less three-quarters of your police pension (Schedule 3 paragraph 6). The police pension is the registered scheme pension and is taxable. The injury pension left after the deduction is the compensation payment HMRC describes as tax-free.
EIM75900 points to EIM75080 for the underlying exemption. That page explains section 644 of the Income Tax (Earnings and Pensions) Act 2003: a disability pension paid because someone was disabled by an injury at work and left their office or employment as a result is exempt to the extent it is more than the pension they would have received if the same injury had not been work-related. The police injury pension is paid only because the injury was received in the execution of duty.
| Police pension scheme (1987, 2006 or 2015) | Police injury benefit scheme (2006 Regulations) | |
|---|---|---|
| What it pays after a duty injury | An ill-health pension (or your ordinary or deferred pension) | A one-off gratuity and an injury pension |
| Why it is paid | You are permanently unfit, whatever the cause (subject to the service conditions) | You are permanently disabled as a result of an injury received in the execution of duty |
| How HMRC describes the pension | Taxable: paid from a registered pension scheme | Can be paid tax-free, as a compensation or injury benefit payment |
| How they interact | Paid in full | Reduced by three-quarters of the police pension (Schedule 3 paragraph 6) |
HMRC says these payments "can be paid tax-free", not that every payment always is. It also says the details of how a compensation payment is paid will be in the scheme rules. If your statement shows tax taken from the injury element, ask your administrator and HMRC rather than assuming either way.
Why the taxable and tax-free split matters
Schedule 3 builds the injury pension in three steps:
- The guarantee. A percentage of average pensionable pay, set by your band and years of service (paragraph 3).
- Less three-quarters of your police pension (paragraph 6). Commutation, allocation and pension debits are ignored, so the deduction is three-quarters of the full pension.
- Less certain benefits for the same injury, week by week (paragraph 7). If the deductions exceed the guarantee, nothing is paid that week (paragraph 8).
So while the injury pension is above nil, your total from the two pensions before tax is the guarantee plus a quarter of your police pension, less any paragraph 7 benefits. A bigger police pension means a bigger total, but only by a quarter of the difference.
Tax changes that. The police pension is taxed. The injury pension it replaces is not. So when the police pension goes up by £1, you gain £1 of taxable income and lose 75p of tax-free income. Whether that is a gain or a loss after tax depends on your tax rate on that extra £1.
| Your tax rate on the extra £1 | Rate | Kept after tax | Tax-free injury pension lost | Net effect |
|---|---|---|---|---|
| No tax on the extra pension (within your Personal Allowance) | 0% | £1.00 | £0.75 | +25p |
| Basic rate | 20% | £0.80 | £0.75 | +5p |
| Higher rate | 40% | £0.60 | £0.75 | minus 15p |
| Additional rate | 45% | £0.55 | £0.75 | minus 20p |
| Income between £100,000 and £125,140 (Personal Allowance taper) | 60% effective | £0.40 | £0.75 | minus 35p |
The last row reflects GOV.UK's rule that the Personal Allowance falls by £1 for every £2 of adjusted net income over £100,000, which gives an effective 60% rate in that range. It will affect few injury pensioners, but it shows the direction.
The injury gratuity: what we can and cannot say
Every injury award includes a one-off gratuity as well as the injury pension (regulation 11(2)), paid in one sum when entitlement arises (regulation 43(6)). People reasonably ask whether that lump sum is taxed.
HMRC's EIM75900 and EIM75080 deal with pension payments. Neither page says how the police injury gratuity is treated for tax. We are not going to guess. Before you plan around the gratuity, ask HMRC, your pension administrator or a qualified tax adviser, and keep their answer in writing.
For the same reason, the worked examples on this page leave the gratuity out entirely. They compare yearly income only.
Worked example: lower tier against upper tier, before and after tax
This uses the same engine as our injury award calculator, with tax applied only to the police pension. It is an illustration, not a real case.
- 10 years' service, all in the 2015 scheme (realistic: nobody has more than about 11.5 years of 2015-scheme service by October 2026).
- Final pay of about £52,015, the site's 2026/27 constable top point, treated as the pay for every year. A real career-average pension will differ.
- Retires at 38 because of a duty injury. Degree of disablement in band 2, so the guarantee is 50% of pay: £26,008.
- No other income. England and Wales income tax for 2026/27. Benefits, pensions increases and the gratuity are ignored.
| Lower tier | Upper tier | Difference | |
|---|---|---|---|
| Ill-health pension (taxable) | £9,406 | £19,753 | plus £10,347 |
| Less 3/4 of that pension from the guarantee | £7,054 | £14,814 | plus £7,760 |
| Injury pension (tax-free) | £18,953 | £11,193 | minus £7,760 |
| Total before tax | £28,359 | £30,946 | plus £2,587 |
| Income tax (on the police pension only) | £0 | £1,437 | plus £1,437 |
| Total after tax | £28,359 | £29,509 | plus £1,150 |
The upper tier adds £10,347 of taxable pension. That cuts the tax-free injury pension by £7,760, so the gain before tax is £2,587, a quarter of the enhancement. On the lower tier the whole police pension falls within the Personal Allowance, so no tax is paid. On the upper tier, £1,437 of tax is due. The real gain is £1,150 a year.
For comparison, if the whole lower tier total of £28,359 were taxable, the tax would be about £3,158 a year. In this example that is roughly what the tax-free status of the injury pension is worth.
The same figures by the month
Most people budget monthly. Dividing the upper tier figures by twelve (tax is in practice collected through the tax code across the year, so real monthly deductions can vary):
| Item | Per month |
|---|---|
| Ill-health pension, before tax | £1,646 |
| Income tax on the ill-health pension | £120 |
| Ill-health pension after tax | £1,526 |
| Injury pension (not taxed) | £933 |
| Total received | £2,459 |
On the lower tier the same officer would receive about £2,363 a month, all of it untaxed in this example because the £9,406 police pension is within the Personal Allowance.
The same officer in every band
The upper tier gain is the same in every band here, because the three-quarters deduction does not depend on the band and the injury pension stays above nil in all four. Each cell shows the total before tax, then after tax.
| Band | Lower tier | Upper tier | Upper tier gain (before / after tax) |
|---|---|---|---|
| Band 1 | £17,956 / £17,956 | £20,543 / £19,106 | plus £2,587 / plus £1,150 |
| Band 2 | £28,359 / £28,359 | £30,946 / £29,509 | plus £2,587 / plus £1,150 |
| Band 3 | £38,762 / £38,762 | £41,349 / £39,912 | plus £2,587 / plus £1,150 |
| Band 4 | £46,564 / £46,564 | £49,151 / £47,714 | plus £2,587 / plus £1,150 |
How other income changes the answer
The after-tax value of the upper tier depends on where the extra pension lands in your tax bands. This hypothetical table keeps the example officer in band 2 and adds different amounts of other taxable income that is not a police pension.
| Other taxable income | Lower tier, after tax | Upper tier, after tax | Upper tier gain after tax |
|---|---|---|---|
| £0 | £28,359 | £29,509 | plus £1,150 |
| £10,000 | £36,992 | £37,509 | plus £517 |
| £20,000 | £44,992 | £45,509 | plus £517 |
| £30,000 | £52,992 | £53,509 | plus £517 |
| £45,000 | £64,165 | £62,613 | minus £1,552 |
With no other income, part of the enhancement sits inside the Personal Allowance and the gain is largest. As other income rises, more of the enhancement is taxed at 20% and the gain shrinks towards 5p in the pound. Once the enhancement is taxed at 40%, the upper tier is worth less than the lower tier after tax.
Who might be in that position? Someone with substantial rental or investment income, for example. The upper tier means the SMP has found you permanently unfit for any "regular employment", which the 2015 scheme defines as employment for an annual average of at least 30 hours a week (2015 regulations 2 and 101(2)), so earnings large enough to reach the higher rate are unusual there. These are illustrations, not predictions.
Why the upper tier gain can be nil or negative for higher-rate taxpayers
Example 1 assumed no other income. Now change one thing.
The same officer also has £45,000 a year of other taxable income that is not a police pension (for example from property or investments). This is a hypothetical to show the effect of the tax band. We use non-police income because any other police pension would itself be deducted at three-quarters under paragraph 6.
| Lower tier | Upper tier | Difference | |
|---|---|---|---|
| Other taxable income | £45,000 | £45,000 | none |
| Ill-health pension (taxable) | £9,406 | £19,753 | plus £10,347 |
| Injury pension (tax-free) | £18,953 | £11,193 | minus £7,760 |
| Income tax on taxable income | £9,194 | £13,333 | plus £4,139 |
| Total after tax | £64,165 | £62,613 | minus £1,552 |
Here the whole enhancement falls in the 40% band. Each extra £1 of pension keeps 60p after tax but costs 75p of tax-free injury pension. On £10,347 of enhancement that is a loss of about £1,552 a year. Before tax the upper tier still looks £2,587 better.
So the after-tax gain from the upper tier runs from a quarter of the enhancement (if all of it falls within your Personal Allowance), down to close to nil for a basic-rate taxpayer (about 5p in the pound above the allowance), and below nil for higher-rate and additional-rate taxpayers. If part of the enhancement falls in one band and part in another, the result is a mix. That is why "the upper tier pays more" is true before tax and may not be true after it.
You do not pick your tier. Under the 2015 scheme the tier follows the selected medical practitioner's decision on whether you are permanently unfit for any regular employment. The point of this section is to help you read your figures honestly, to plan your budget, and to understand what is really at stake in an appeal or review about the tier. Do not appeal, or decline to appeal, on the strength of this page alone: take advice on your own figures.
When the injury pension is already nil
The arithmetic above only holds while the injury pension is above nil. Paragraph 8 says that in any week where the deductions exceed the guarantee, no injury pension is paid. Once that happens, a bigger police pension is no longer offset at all.
Example 3: an officer with 4 years' service retires at 26 on pay of about £36,335, band 1. On the lower tier the pension is £2,628 and the injury pension £3,479. On the upper tier the pension is £10,513; three-quarters of it (£7,885) is more than the £5,450 guarantee, so the injury pension is £0. After tax the totals are £6,107 and £10,513.
So for low bands, short service or large police pensions, most or all of the income may be taxable police pension and little or none tax-free injury pension. The tax-free label only helps where an injury pension is actually being paid.
To check your own position, look at your latest award letter or statement for three figures: the guarantee (sometimes called the minimum income guarantee), the amount deducted for your police pension, and the injury pension actually paid. If the deduction is larger than the guarantee, your injury pension is nil for now, and the per-pound table above does not apply to you. The award still exists, and a later band change or a change in your police pension can bring it back into payment.
A band change on review, after tax
Because the injury pension is not taxed, a change of band on a regulation 37 review hits your income in full. Take the worked example officer on the lower tier in band 2. If a review moved them to band 1:
| Band 2 | Band 1 | Change | |
|---|---|---|---|
| Guarantee | £26,008 | £15,605 | minus £10,403 |
| Injury pension (not taxed) | £18,953 | £8,550 | minus £10,403 |
| Police pension (taxable) | £9,406 | £9,406 | none |
| Income tax | £0 | £0 | none |
| Total after tax | £28,359 | £17,956 | minus £10,403 |
The fall in take-home income is the full £10,403. There is no tax saving to soften it, because no tax was being paid on the injury pension in the first place. The same works in reverse: a move up a band on review is an increase in untaxed income. That is one reason a review is worth preparing for properly; see reviews, age 65 and whether the pension is for life and our full review guide.
1987 and 2006 scheme pensioners
The tax split is the same whatever your scheme: the police pension is taxable, the injury pension can be paid tax-free. What differs is the shape of the police pension.
- 1987 scheme. There is one ill-health pension, with no lower and upper tier, so the tier comparison above does not arise. The split still matters for budgeting and for reviews.
- 2006 scheme. There is a standard ill-health pension and an enhanced top-up for those unfit for any regular employment, so the same kind of after-tax comparison applies.
- Transition members. For officers who moved to the 2015 scheme with continuity of service, Schedule 3 paragraph 4A (added by SI 2018/997) works out the gratuity and guarantee as if all their service had been in the 1987 or 2006 scheme. Their police pension may come from more than one scheme. Use your pension statement, not our examples.
22 years' service, average pensionable pay of £36,000 (a round figure), band 2. The ill-health pension is £18,600 a year and taxable: about £1,206 of tax with no other income. The injury pension is £7,650 (the £21,600 guarantee less £13,950) and is not taxed. Total after tax: £25,044. If the whole £26,250 were taxable, the tax would be about £2,736. Pensions increases since retirement are ignored.
Do the after-tax comparison for your own figures
You need your pension statement (or the calculator's estimate) and your other taxable income for the year.
- Write down your police pension, before commutation. This is the taxable part.
- Write down your injury pension as paid. This is the part HMRC describes as tax-free.
- Add your other taxable income for the tax year: State Pension, earnings, rental or investment income.
- Work out the income tax on the police pension plus that other income, using GOV.UK's rates for the year (or the Scottish rates if they apply to you).
- Your total after tax is: police pension, plus other income, minus that tax, plus the injury pension.
- To test a change (a different tier, a band change on review, the State Pension starting), repeat steps 1 to 5 with the new figures. Remember that a change in the police pension moves the injury pension by three-quarters in the opposite direction while it is above nil.
- Leave the gratuity out unless HMRC or an adviser has told you how it is taxed in your case.
If the result matters for a decision, such as whether to appeal, ask a tax adviser to check it. Bring the HMRC references (EIM75900, EIM75080) and your award letter.
- How is the one-off injury gratuity treated for income tax in my case?
- Is my injury pension being paid without tax, and is my tax code applied only to the police pension?
- What will my tax position be when my State Pension starts?
- If my police pension changes on review, how will that change my tax and my injury pension?
- Does any other income I have change the comparison between the tiers?
- Are there any tax points on a commutation lump sum I should know before I decide?
| Question | Who to ask |
|---|---|
| How much is my police pension and my injury pension, and how are they split? | Your pension administrator, in writing |
| Is my tax code right? Has tax been taken from the wrong payment? | HMRC, with your administrator's breakdown |
| How is the gratuity taxed? What about lump sums? | HMRC or a qualified tax adviser |
| Is my band or tier right? Should I appeal? | Your Federation representative or a solicitor |
| How does my injury pension affect DWP benefits? | DWP or a welfare rights adviser |
Where the tax split changes the picture
- Comparing the tiers. As above: compare after tax, and only while the injury pension stays above nil.
- A band change on review. A move between bands changes the guarantee, so it changes the injury pension pound for pound (while above nil). Because the injury pension is tax-free, a band change is a change in untaxed income: a £5,000 cut in the injury pension is a £5,000 cut in what you receive, not £4,000 or £3,000. See reviews and age 65.
- Losing the upper tier enhancement on review. If a 2015 regulation 114 review stops the enhancement, the police pension falls. On the Schedule 3 arithmetic, three-quarters of a smaller pension is deducted, so the injury pension would rise by three-quarters of the lost enhancement while above nil. In the worked example, losing the £10,347 enhancement would take the officer from £29,509 to £28,359 after tax: a fall of £1,150, not £10,347. Ask your administrator to confirm any recalculation in writing.
- Commuting your pension for a lump sum. Paragraph 6(2) ignores commutation, so the injury pension does not rise to make up for the pension you give up. Commutation does not convert taxable pension into tax-free injury pension. The tax treatment of a commutation lump sum from the police pension scheme is a separate matter we do not cover here.
- Divorce and pension sharing. Paragraph 6(2)(c) ignores a pension debit, so if part of your police pension is shared on divorce the injury pension does not increase to replace it.
- Budgeting. When you plan a household budget from an award letter, use the after-tax figure for the police pension and the full figure for the injury pension.
The police injury award calculator gives the guarantee, the three-quarters deduction and the injury pension for each band from your pay, service and pension. Take its police pension figure, work out the tax on that part only, and add the injury pension back untaxed. That gives you the after-tax comparison on this page for your own numbers.
Before an appeal or review about your tier
Money is only one part of a tier decision, and the tier is a medical decision, not a financial choice. But if you are weighing up an appeal about the tier, or preparing for an upper tier review, these points from the regulations belong alongside the after-tax figures:
- The upper tier enhancement is reviewable until State Pension age. Under 2015 regulation 114, reviews can happen at intervals of no less than five years, and the enhancement stops three months after a report finding you no longer unfit for regular employment (or earlier if you return to service).
- The lower tier continues for life unless a review finds you no longer unfit for ordinary police duties (2015 regulation 114(7)).
- The injury pension has its own review rule (regulation 37 of the injury benefit regulations), with no age limit and no minimum interval.
- After tax, the money at stake may be smaller than the headline. In our example the upper tier is worth £1,150 a year after tax with no other income, against an enhancement of £10,347.
- Time limits do not wait for the arithmetic. Appeals against an SMP decision under the 2015 scheme need notice within 28 days of receiving the report, and grounds within a further 28 days (Schedule 1 paragraph 2), with any extension at the authority's discretion.
Take your own figures to your Federation representative or a solicitor. The point is to see the real numbers, not to decide for you.
How your tax position can change over time
| When | What changes | Effect on tax |
|---|---|---|
| Retirement with an injury award | Police pension starts (taxable); injury pension starts (can be tax-free) | Your Personal Allowance is used by the police pension and any other taxable income |
| Each April | Amounts are normally uprated; your award letters show the current figures | Not modelled on this page |
| An injury pension review changes your band | The guarantee changes, so the injury pension changes pound for pound while above nil | No change in tax, because the injury pension is not taxed |
| A 2015 upper tier review stops the enhancement | Police pension falls; on the Schedule 3 arithmetic the injury pension rises by three-quarters of the fall while above nil | Less tax to pay |
| A listed benefit starts, such as IIDB for the duty injury | Deducted from the injury pension week by week | Depends on the benefit's own tax treatment |
| State Pension age | State Pension starts; it is not deducted from the injury pension | More of the police pension is likely to be taxed |
We have not modelled annual increases. Use the figures on your latest award letter or pension statement.
At State Pension age
Your State Pension does not reduce your injury pension: it is not on the paragraph 7 list. But GOV.UK confirms the State Pension counts towards your taxable income. In practice it will use up much or all of your Personal Allowance, so from State Pension age more of your police pension is likely to be taxed than before.
For 2026 to 2027 GOV.UK gives the standard Personal Allowance as £12,570, with basic-rate tax at 20% on taxable income from £12,571 to £50,270 and higher-rate tax at 40% above that. Your State Pension and your police pension are added together to see which bands you fall in. The injury pension is not added, on HMRC's description of it as tax-free.
That makes the taxable and tax-free split matter more in later life. A pensioner who paid no tax on a small ill-health pension in their 50s may pay basic-rate tax on all of it once the State Pension starts. The injury pension stays tax-free throughout.
Your injury pension does not stop or reduce at State Pension age. See is a police injury pension for life?
Benefits: a short note
Two different questions often get mixed up:
- Which benefits reduce the injury pension? Schedule 3 paragraph 7 deducts certain injury-related benefits paid for the same week, such as industrial injuries disablement benefit for the duty injury and, in limited cases, contributory ESA. PIP, Universal Credit and the State Pension are not on that list.
- How does DWP treat the injury pension? Whether an injury pension counts as income for means-tested benefits is a DWP question with its own rules. Income tax status does not decide it.
Both are covered in our guide to injury awards and DWP benefits (PIP, ESA and Universal Credit), and the deduction rules in detail in our deductions guide. Benefits have their own tax treatment, which we do not cover here.
Checking your payments and your tax code
We have not verified how each police pension administrator shows the two payments on statements and P60s, so these are questions to ask rather than rules to apply:
- Does my statement show the police pension and the injury pension as separate lines?
- Which payment is my tax code applied to?
- Has any tax been deducted from the injury pension element? If so, why?
- If my police pension changed (for example the upper tier enhancement stopped), when was the injury pension recalculated?
- What figure are you deducting three-quarters of, before commutation?
Put the questions in writing and keep the replies. If the tax still looks wrong, contact HMRC about your tax code. If you use a tax adviser, give them this page's HMRC references: EIM75900 and EIM75080.
If you are a Scottish taxpayer, your taxable police pension is taxed at Scottish rates and bands, which are different from the England and Wales figures used here. The principle is the same: compare the after-tax value of the extra police pension with the three-quarters of tax-free injury pension it replaces. Check GOV.UK's Scottish Income Tax page for the current bands.
Common mistakes
- "My whole medical pension is tax-free." Only the injury pension part is described as tax-free. The ill-health pension is taxable.
- "The upper tier always pays more." Before tax, yes, while the injury pension is above nil. After tax the gain is small for a basic-rate taxpayer and can be negative for a higher-rate taxpayer.
- "The gratuity is tax-free." The HMRC pages we read do not say. Ask HMRC or a tax adviser.
- "Commuting will increase my tax-free injury pension." No. Paragraph 6(2) disregards commutation.
- "The State Pension is deducted from my injury pension." No. But it is taxable and uses up your Personal Allowance.
- "Tax-free means it does not count for benefits." Income tax and DWP rules are separate. See the DWP benefits guide.
- "A band cut only costs me the after-tax amount." No. The injury pension is untaxed, so a cut is a cut in full.
- "Losing the upper tier enhancement costs me the whole enhancement." Before tax it costs a quarter of it while the injury pension is above nil, because the injury pension rises by three-quarters. After tax the cost can be smaller still. Confirm the recalculation with your administrator.
- "Higher-rate taxpayers should avoid the upper tier." You do not choose a tier. It follows the SMP's medical decision. The after-tax figures help you understand your income, not pick a tier.
- "Tax-free means I can ignore it on any form." Income tax status is one question. Benefits, divorce settlements and other forms can ask about all income. Answer what each form asks.
Not verified or needs checking
- The injury gratuity. Its tax treatment is not stated in EIM75900 or EIM75080. We say nothing definitive. Ask HMRC or a qualified tax adviser.
- How payments are reported. We did not verify how administrators show the injury pension on statements, P60s or to HMRC, or how tax codes are applied across the two payments.
- Lump sums from the police pension scheme. The tax treatment of commutation lump sums, the 2006 scheme lump sum and any serious ill-health lump sum is outside this page.
- Benefits. The tax treatment of DWP benefits, and how DWP counts an injury pension for means-tested benefits, are not covered here.
- Engine simplifications. Final pay is treated as today's salary for every year, and pensions increases, benefits and the gratuity are left out. Real figures will differ; use your pension statement.
- Scotland. Scottish rates and bands are not modelled.
- Survivors' awards. The tax treatment of special pensions and gratuities paid to a surviving spouse, partner or child after a death from a duty injury is outside this page.
- Other income tax rules. Marriage Allowance, Blind Person's Allowance, savings and dividend allowances and other reliefs are ignored in the examples.
- Individual cases. HMRC's manual is guidance for its staff and says these payments "can" be paid tax-free. It does not settle any individual case.
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Frequently Asked Questions
Is a police injury pension tax-free?
HMRC's Employment Income Manual (EIM75900) says payments from injury benefit schemes such as the police scheme can be paid tax-free. Where the injury payment is reduced by a pension from the registered police pension scheme, that pension is taxable and only the reduced injury payment is tax-free.
Is a police ill-health pension taxable?
Yes. An ill-health pension, like an ordinary police pension, is paid from the registered police pension scheme and is taxable. EIM75900 says the amount payable from the registered pension scheme is taxable. Only the injury pension from the injury benefit scheme is described as tax-free.
Is the police injury award lump sum (gratuity) taxable?
The HMRC pages we read (EIM75900 and EIM75080) deal with pension payments and do not say how the one-off injury gratuity is taxed. We do not give an answer. Ask HMRC, your pension administrator or a qualified tax adviser before you rely on any figure.
Does the injury pension use up my Personal Allowance?
If it is paid tax-free, it is not taxable income, so on HMRC's description it should not use up your Personal Allowance. Your taxable police pension, State Pension and any other taxable income do. Check your tax code with HMRC if you are unsure.
Why is the upper tier worth less than I expected after tax?
Every extra pound of taxable ill-health pension reduces the tax-free injury pension by 75p (Schedule 3 paragraph 6), as long as the injury pension stays above nil. Before tax you gain 25p. After basic-rate tax you gain about 5p, and a higher-rate taxpayer loses about 15p.
Can being on the upper tier leave me worse off?
In money terms, it can for a higher-rate or additional-rate taxpayer whose injury pension is above nil, because the extra pension is taxed at 40% or more while the injury pension it replaces is tax-free. In our hypothetical example the upper tier leaves the person about £1,552 a year worse off. You do not choose your tier: it follows the medical decision.
Does commuting part of my police pension increase my injury pension?
No. Schedule 3 paragraph 6(2) treats a pension reduced by commutation as if it had not been reduced, so three-quarters of the full pension is still deducted. Commuting does not convert taxable pension into tax-free injury pension.
Is the State Pension taken off a police injury pension?
No. The State Pension is not on the list of deductions in Schedule 3 paragraph 7. It is taxable income, though, so from State Pension age more of your police pension may be taxed.
Is a police injury pension tax-free in Scotland?
HMRC's manual is UK-wide and does not distinguish Scotland. Scottish taxpayers pay Scottish rates and bands on their taxable income, including a taxable police pension, so the after-tax comparison on this page uses different rates. Check GOV.UK's Scottish Income Tax page.
Does a police injury pension affect benefits like Universal Credit or PIP?
Some injury-related benefits are deducted from the injury pension, and how DWP treats an injury pension for means-tested benefits is a separate question. Our DWP benefits guide covers both. Tax-free status for income tax does not decide how DWP counts it.
What should I do if tax seems to be taken from my injury pension?
Ask your pension administrator in writing to show how the payment is split between the taxable police pension and the injury pension, and which part is taxed. If it still looks wrong, contact HMRC about your tax code. Keep copies of payslips and P60s.
Sources and how we checked them
Every factual claim on this page was written from the sources below, read on 7 October 2026. Rules and figures change, so check the source for the date you are reading this. Where we could not confirm something from an official or independent source, the page says so rather than guessing. Spotted something out of date? See our corrections policy.
- HMRC Employment Income Manual EIM75900 (injury benefit schemes, including police and firefighters) — payments from injury benefit schemes 'such as those for police and firefighters, can be paid tax-free'; where reduced by a registered scheme pension, that pension is taxable and only the reduced compensation payment is tax-free (accessed 7 October 2026)
- HMRC Employment Income Manual EIM75080: pension payments exempt from tax — section 644 ITEPA 2003: disability pensions for injury at work exempt to the extent they exceed what would be paid without the work link (accessed 7 October 2026)
- GOV.UK: Income Tax rates and Personal Allowances — 2026 to 2027: Personal Allowance £12,570; basic rate 20% to £50,270; higher rate 40% to £125,140; additional rate 45%; allowance reduced by £1 for every £2 over £100,000 (accessed 7 October 2026)
- GOV.UK: Tax when you get a pension — the State Pension and other pensions count towards taxable income (accessed 7 October 2026)
- GOV.UK: Scottish Income Tax — Scottish taxpayers have different rates and bands (not used in our examples) (accessed 7 October 2026)
- Police (Injury Benefit) Regulations 2006 (SI 2006/932), Schedule 3 (as made) — para 3 guarantee; para 6 three-quarters pension deduction, commutation and pension debits disregarded; para 7 benefits list; para 8 no payment where deductions exceed the guarantee (accessed 7 October 2026)
- SI 2006/932, regulations 11 and 43 — gratuity and injury pension under Schedule 3 (reg 11(2)); gratuity paid in one sum when entitlement arises, pension payable for life (reg 43) (accessed 7 October 2026)
- SI 2018/997, regulation 22 (as made) — extends the Schedule 3 paragraph 6 deduction to 2015-scheme pensions (accessed 7 October 2026)
- Police Pensions Regulations 2015, regulations 104 and 114 — upper tier enhancement (104); upper tier reviews at least 5 years apart until State Pension age, lower tier continues for life (114) (accessed 7 October 2026)
- Police Pensions Regulations 2015, regulations 2 and 101, and Schedule 1 paragraph 2 — 'regular employment' means an annual average of at least 30 hours a week (reg 2); lower and upper tier thresholds (reg 101); 28 plus 28 days to appeal an SMP decision (Sch 1 para 2) (accessed 7 October 2026)
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Disclaimer
PolicePay.co.uk is an independent reference site. This page is general information, not legal, medical or financial advice, and the outcome of any injury award or ill-health retirement decision turns on the medical evidence and the facts of the individual case. Decisions are made by the police pension authority, selected medical practitioners and appeal boards, and the regulations are amended from time to time. Speak to your Police Federation representative or a solicitor about your own case, and your pension administrator about your figures. If you are struggling, speak to your GP or one of the services listed on our support directory; if you or someone else is in immediate danger, call 999. Details apply to England and Wales unless stated. Details are as checked on 7 October 2026.