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HMRC internal manual

Tax Credits Technical Manual

Income: employment income rules - Specific payments and benefits in kind excluded from employment income for tax credit purposes

Pay As You Earn (PAYE) Settlement Agreements, The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg. 4(4) Table 1 (Item 20)

Any Pay As You Earn (PAYE) settlement agreements made under Part 6 of the Income Tax (PAYE) Regulations 2003

The special arrangements under regulation 141 of the PAYE regulations also apply.

Fees relating to vulnerable persons’ monitoring schemes, The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg. 4(4) Table 1 (item 21).

The payment or reimbursement on or after 6t h April 2012 of a fee within the section 326A(1) of ITEPA(a) (fees relating to vulnerable persons’ monitoring schemes) 

Limited exemption for qualifying bonus payments, The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg. 4(4) Table 1 (item 22)

The payment of a qualifying bonus within section 312A of ITEPA (limited exemption for qualifying bonus payments).

 

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.