What State Benefits Taxable?

Only certain state benefits are taxable, these include:

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

Other state benefits are not taxable and these include:

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

New Here? These are my most popular resources:

  • The Ultimate Bookkeeping Spreadsheet – Organise your money, track the numbers that matter and stay on top of your cash;
  • Freebies – templates, spreadsheets, calculators and cheat sheets. Here you’ll find all my freebies for the self-employed community, all in one place.
  • Sole Trader or Limited Company? – Download my free calculator to check which business structure would help you to pay less tax;
  • FREE Business Expenses Cheatsheet – Check what you can and can’t claim as an expense against your taxes.
  • 6 Core Elements of Self-Employment Taxes – Confused by taxes? Worried you’re missing something when it comes to tax allowances and reliefs? These easy to follow 6 mini-guides will have you on top of the tax side of things in no time at all.
Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - a UK small business finance blog where she shares help and advice with the self-employed community to make topics like registering a business, bookkeeping and taxes easy to understand.