HMRC internal manual

Tax Credits Technical Manual

Income: Employment income rules: Any amount chargeable to income tax under Chapter 3 of Part 6 of the ITEPA 2003

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

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

These are payments or other benefits in connection with the termination of a person’s employment, a change in the duties of a person’s employment or a change in the earnings from a person’s employment. It does not matter whether the payment was received by the person, their spouse, blood relative, dependant or personal representative.

Examples are; statutory redundancy pay and compensation payments for wrongful or unfair dismissal.

The amount to include as income is the amount in excess of £30,000.

This is the income tax provision. See Employment Income Manual paras EIM13760 (redundancy) and EIM12950-12970 (compensation) for further details. All payments within Chapter 3 of Part 6 of ITEPA, to the extent that they are taxable, count as income from employment for tax credit purposes.