When an accident keeps you off work, the lost income often dwarfs the compensation for the injury itself. UK courts allow you to recover both past loss (income lost between accident and settlement) and future loss (income you'll continue to lose). This guide walks through how each is calculated, what evidence you need and the special rules that apply to the self-employed and those with variable pay.
Past loss is the net (after tax and NI) income you would have received but for the accident, less anything you actually did receive. Statutory sick pay, contractual sick pay and benefits like ESA and Universal Credit are all deducted to avoid double recovery.
For an employee, the standard evidence is 13 weeks of pre-accident payslips, your P60, a letter from HR confirming dates off work and any sick pay paid. The defendant will be entitled to see those documents in disclosure, so prepare them early.
If your injury will continue to affect your ability to earn after settlement, you're entitled to future loss. Courts use the Ogden Tables, which apply a 'multiplier' to your annual loss based on your age, retirement age and the discount rate (currently -0.25%).
Example: a 35-year-old with a £8,000-a-year ongoing loss to age 68 has an Ogden multiplier of around 31. Future loss = £8,000 × 31 = £248,000. The maths is unforgiving, which is why expert evidence on prognosis matters so much.
If you're self-employed, the starting point is three years of tax returns or accounts. The court will look at your average net profit and any trend (rising or falling). For a sole trader injured at the start of the tax year, you may need to extrapolate from prior years and adjust for known contracts you couldn't fulfil.
If your income is heavily commission-based or seasonal, the same averaging approach applies but with finer-grained evidence — typically 12 months of payslips plus any commission statements. Bonuses you would have earned with reasonable certainty are recoverable.
Pension contributions you missed, including employer matching, are recoverable. So is the loss of bonus accrual, share scheme participation, private medical cover and any other benefit with a quantifiable value. For final salary or career-average pensions, the long-term loss can be very large and usually requires a forensic accountant or actuary.
Travel costs to medical appointments, replacement childcare, paid help with housework you'd normally do yourself and equipment like crutches all sit under 'special damages' alongside lost earnings.
Even if you've returned to your old job at the same pay, you may be entitled to a Smith v Manchester award if your injury makes you more vulnerable to losing that job in future or struggling to find another. Typical awards range from six months to two years of net pay.
The award is broad-brush rather than mathematical. The court considers your age, the security of your current role, the labour market and how transferable your skills are. It's commonly overlooked by claimants representing themselves.
Most state benefits paid because of the accident are recovered by the DWP via the Compensation Recovery Unit and deducted from your award. Your solicitor handles this.
Then your past loss is your full net pay — no deduction. Keep wage slips and the contract showing no contractual sick pay was due.
Yes if you can show a regular pattern of overtime in the months before the accident.
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