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HMRC internal manual

Tax Credits Technical Manual

Income: Employment income rules: Earnings from a claimant's office or employment in the tax year

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg 4 (1)

Employment income is defined as any earnings from an office or employment received in the tax year, including not just all money payments arising out of the office or employment but also some payments or benefits in kind.

Employment income is not restricted to that received in the UK and should also include any payments made to the claimant or claimants in any part of the world (converted into £ sterling).


Note: With effect from 6 April 2017 the way in which many salary sacrifice and benefit in kind schemes are taxed will change, which means that some tax credit claimants will see an increase in their taxable income.

For the purposes of tax credits, where one of these schemes is in operation the taxable income figure should be used.