Taxable and non-taxable State Benefits

Posted on 16th July 2024 by Streets - HMRC notices

Whilst there are a large number of state benefits available, it is not clear which of these benefits are taxable and which are tax-free.

HMRC’s guidance provides the following list of the most common state benefits that are taxable, i.e., Income Tax is payable, subject to the usual limits:

Bereavement Allowance (previously Widow’s pension)
Carer’s Allowance
contribution-based Employment and Support Allowance (ESA)
Incapacity Benefit (from the 29th week you get it)
Jobseeker’s Allowance (JSA)
pensions paid by the Industrial Death Benefit scheme
the State Pension
Widowed Parent’s Allowance

The most common state benefits you do not have to pay Income Tax on are:

Attendance Allowance
Bereavement support payment
Child Benefit (income-based - use the Child Benefit tax calculator to see if you’ll have to pay tax)
Child Tax Credit
Disability Living Allowance (DLA)
free TV licence for over-75s
Guardian’s Allowance
Housing Benefit
Income Support - though you may have to pay tax on Income Support if you’re involved in a strike
income-related Employment and Support Allowance (ESA)
Industrial Injuries Benefit
lump-sum bereavement payments
Maternity Allowance
Pension Credit
Personal Independence Payment (PIP)
Severe Disablement Allowance
Universal Credit
War Widow’s Pension
Winter Fuel Payments and Christmas Bonus
Working Tax Credit

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