HMRC internal manual

Employment Income Manual

Pensions: particular occupations: police officers and firefighters

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A member of the police force who is permanently disabled as a result of injury sustained in the execution of his or her duty may receive an ‘injury award’ gratuity and pension in addition to an ordinary pension, a short service pension or an ill health pension. A special constable in similar circumstances may receive an ‘injury award’ gratuity and pension but may not be entitled to any other pension.

The tax treatment of these different awards is as follows –

  • Ordinary and short service pensions are taxable
  • ‘Injury award’ gratuities and pensions are exempt under section 644 ITEPA 2003 (see EIM74012)
  • Ill health pensions are taxable except where awarded to a person having less than two years service (previously five years) or a special constable. Such persons could only be awarded an ill health pension if retirement resulted from an injury on duty so section 644 ITEPA exempts ill health pensions received in these circumstances.

The position with regard to the fire service is virtually identical. Ordinary, short service and ill health pensions are taxable; ‘injury’ pensions are not. Pensions awarded to fire service personnel solely on the grounds of injury whilst on duty, even if called ill health pensions, are regarded as exempt under section 644 ITEPA. These individuals will either not be regular firefighters or will not have served two (previously five) years.