Financial Payment and Tax FAQs

Tax status of Healing Process Payments

HMRC has now reviewed the unique features of the Healing Process and determined that while any payments made for loss of earnings whilst in employment are taxable, any other payments determined with reference to harm and healing are not taxable. 

We welcome this clarification, which will enable participants to benefit further from the Healing Process and apologise for confusion and hurt caused as a result of the tax implications of the Healing Process payments not being highlighted earlier, and for making payments before seeking clarification from HMRC.

Updated position as at 22 February

We have included information below about the process for making payments going forward. The first comments relate to the process going forward. We have also included information which is relevant to those who received notification of an outcome at an earlier stage in the process when the taxation position and logistics for payments were being finalised.

How will I receive payment?

Payment can be made in one of two ways.  

  1. Our standard method is via BACS transfer, processed through our finance system.  This means that your name and the amount have to be attached to the payment, but it is processed as an “ex gratia” payment and has no reference to the Healing Process.   This method takes up to 14 days from receipt of your details being acknowledged.
  1. If you have any concerns about this method, we can pay via Shepherd and Wedderburn solicitors.  This will take up to 28 days from receipt of details, as it involves additional processing and checks, but your name is not shared with finance, only your unique THP reference number. Please note that this is not the default method of payment, and if you would like to use this option, you must let us know so that we can make the required arrangements. This will be explained in your outcome letter.

Who in NHS Highland will be processing the payment?

As explained above, our standard method of payment is via BACS transfer, processed through our finance system. The payment is initiated by our NHS Highland accounts payable team and processed on our EFinancials payment system.  Your name and the amount of the payment will be visible on the system, but it is recorded as an ex gratia payment with no reference to the Healing Process. All colleagues working in our finance team and involved in processing and reconciliation of payments are trained and regularly reminded of the need for confidentiality regarding any information relating to payments which they process or have access to. 

How long will my personal details remain on the finance system after processing?

6 years as per national recordkeeping requirements.

Will a financial payment from the healing process impact my benefits?

We also note that any payment may impact benefit claims or receipt. Unfortunately, that is not a matter within our control.    We recommend those with concerns to seek advice and support from the Citizens Advice Bureau which can be obtained via online referral at There is also welfare advice available from Highland Council or 0800 090 1004 or in Argyll & Bute, there is an online referral form at Welfare Rights Enquiry Form ( helpline on 01546 605517.

I am concerned about confidentiality, how will NHS Highland manage payments?

NHS Highland ensure access to information is kept to the absolutely minimum needed to process the payment and observe our financial and audit requirements and strict confidentiality is observed.  Further details are set out here (

Where do I go if I have any questions about this?

Questions regarding payment and related matters should be directed to the dedicated confidential email address, . This is also where participants will be asked to send their bank details and some other information to process their payments.

For those who have already received an outcome prior to 6 February 2021

This section contains information relevant to those who received an outcome prior to 6 February 2021

The Independent Panel has confirmed that none of the payments it has recommended to date were intended to compensate for loss of earnings during employment.  Therefore, all participants in the Healing Process who have concluded the process and received notification of a payment will not have to pay tax and national insurance on this.

We recognise that participants did not appreciate that payments were initially due to be made via payroll, which caused them further distress and concern, we apologise for the lack of clarity and the impact this had.

For those who have already received a payment via payroll prior to 6 February

23 participants have already received a payment via payroll, deducting tax and national insurance. NHS Highland will reprocess payments to everyone who has received a payment through payroll, correcting the tax and NI position and issuing refunds as applicable. This will be processed automatically: there is no need for participants to do anything. These changes will be processed in payroll on 26th February.

Former employees who were added back onto payroll to receive their payment, will require to be added back again in order to correct this.  However, this will then end their payroll record and further P45 will not be produced. The information about the refund will be electronically transmitted to HMRC in order to update your record. 

Some participants who are former employees may have separately already received a refund of part of the tax paid, directly from HMRC. People in this position should contact HMRC to clarify whether some of their payroll refund is due to HMRC.

For those who received an outcome prior to 6 February but have not yet received payment 

Where a payment from the Healing Process is regarded as not subject to tax, all new payments will now be able to be processed as a bank transfer.  Where some or all of a payment is subject to tax, this element will need to be processed through payroll (we expect this to happen only rarely and where this is the case it will be explained to participants in advance).

Some participants who have already been notified of their payment outcome have elected to wait until the tax position was clarified before receiving payment.  They will now be contacted and on receipt of their information, payments will be processed through bank transfer, within 14 days of receipt of their details.

For those who have not yet received an outcome 

As explained above, in future, the Independent Panel will make clear in its recommendations what element, if any, of any financial payment is made for loss of earnings whilst in employment and so liable to tax. This will enable payments to be correctly taxed at source, where this is needed.

Why has this taken so long?

NHS Highland had to receive a clear direction from HMRC before we could process payments without tax and national insurance and this could only be sought once the first panel recommendations had been received. However, this could have been sought some weeks earlier than it was, rather than payments being processed as the priority.   We are sorry for any confusion or distress that this matter has caused.   The determination from HMRC is a really positive step forward and with a very wide applicability and no limitations on the amount that can be paid tax free, this is a more positive outcome than we could have hoped for.