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HMRC internal manual

Employment Income Manual

Social security benefits: list of non-taxable social security benefits

Part 10 ITEPA 2003

UK social security benefits specified at Table B Parts 1 and 2 at Section 677(1) ITEPA 2003 are wholly exempt from tax.

The following benefits are not taxable. The benefits are described at the paragraphs mentioned below:

  • Attendance Allowance
  • Back to Work Bonus (see EIM76223)
  • Bereavement Payment (see EIM76171), replaced Widow’s Payment from 9 April 2001
  • Child Benefit
  • Child’s Special Allowance
  • Child Tax Credit
  • Cold Weather Payments, see also Winter Fuel payment
  • Council Tax Benefit, administered by local authorities
  • Constant Attendance Allowance, see industrial disablement benefit below
  • Disability Living Allowance
  • Income related Employment and Support Allowance (see EIM76186
  • Exceptionally Severe Disablement Allowance, see industrial disablement benefit below
  • Guardian’s Allowance
  • Housing Benefit, administered by local authorities
  • Incapacity Benefit for first 28 weeks of entitlement, taxable thereafter (see EIM76180)
  • Income Support, certain payments (see EIM76190)
  • Industrial Injuries Benefit, a general term covering industrial injuries pension, reduced earnings allowance, retirement allowance, constant attendance allowance and exceptionally severe disablement allowance
  • Invalidity Benefit, replaced by Incapacity benefit from April 1995 but still payable where invalidity commenced before April 1995.
  • In-work credit
  • In-work emergency discretion fund payment
  • In-work emergency fund payment
  • Maternity Allowance, see EIM76361 
  • Payments out of the Social Fund to people on a low income to help with maternity expenses, funeral costs, financial crises and as community care grants. The fund also makes interest-free loans.
  • Pensioner’s Christmas Bonus
  • State Pension credit
  • Reduced Earnings Allowance, see industrial disablement benefit above
  • Retirement Allowance, see industrial disablement benefit above
  • Return to work credit, including the self-employment credit
  • Severe Disablement Allowance
  • Universal Credit
  • War Widow’s pension, see EIM76103 
  • Winter Fuel payment
  • Working Tax Credit.

With regard to wounds and disability pensions for service with the forces see EIM74302 and for allowances payable to civilians in respect of war injuries see EIM74700.

Certain foreign social security payments are exempt from UK tax (see EIM76009).