What state benefits are taxable? What state benefits are tax-free?
This is a freeview 'At a glance' guide to taxable and non-taxable state benefits.
Taxable
State benefits which are taxable, and subject to Income Tax, are:
- Bereavement Allowance (deaths before 6 April 2017).
- Carer’s Allowance.
- Carer’s Allowance Supplement (Scotland).
- Employment and Support Allowance (ESA) (contribution-based).
- Incapacity Benefit (from the 29th week of receipt).
- Invalidity Allowance (when paid with retirement pension).
- Jobseeker’s Allowance (JSA) (subject to limits).
- Industrial Death Benefit scheme pensions (deaths before 11 April 1988).
- State Pension.
- Statutory Adoption Pay.
- Statutory Maternity Pay.
- Statutory Parental Bereavement Pay.
- Statutory Paternity Pay.
- Statutory Shared Parental Pay.
- Statutory Sick Pay.
- Widowed Parent’s Allowance (deaths before 6 April 2017 only. Replaced by Bereavement Support Payment).
Non-taxable
State benefits which are tax-free, and not subject to Income Tax, are:
- Armed Forces Independence Payment.
- Attendance Allowance.
- Bereavement Support Payment.
- Child Benefit (but this might be subject to the High-Income Child Benefit Charge).
- Child Disability Payment (Scotland)
- Child Tax Credit.
- Disability Living Allowance (DLA).
- Employment and Support Allowance (ESA) (income-related).
- Free TV licence for the over-75s.
- Guardian’s Allowance.
- Housing Benefit (income related).
- Incapacity Benefit (first 28 weeks).
- Income Support (unless on strike).
- Industrial Injuries Benefit.
- Lump-sum Bereavement Payments.
- Maternity Allowance.
- Pension Credit.
- Personal Independence Payment (PIP).
- Scottish Child Payment.
- Severe Disablement Allowance.
- Universal Credit.
- Vaccine Damage Payment.
- War Disablement Pension.
- War Widow’s Pension.
- Winter Fuel Payment and Christmas Bonus.
- Working Tax Credit.
Useful guides on this topic
High-Income Child Benefit Tax Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals?
Tax Data Card 2024-25
A summary of key tax rates and allowances for 2024-25 and 2023-24.
Personal allowance: Who is entitled to claim?
Am I entitled to the UK personal allowance? Are there circumstances when the Personal allowance is not available?
How to avoid paying top rates of tax
How do you avoid paying top rates of tax? What are the rates and what reliefs may be claimed?
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