2. Income
Many types of income (eg earnings and state benefits) are taxable, but some are exempt (eg interest on an Individual Savings Account or ‘ISA’) and so are ignored for tax. Tax relief is allowed on certain outgoings (eg pension contributions).
The following are the only taxable state benefits:
•widowed parent’s allowance;
•carer’s allowance (and carer’s allowance supplement in Scotland);
•‘new style’ and contributory employment and support allowance;
•income support (if you are directly involved in a trade dispute);
•invalidity allowance (paid with a state pension);
•industrial death benefit;
•jobseeker’s allowance;
•state pension; and
•statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory parental bereavement pay and statutory sick pay.
Test and trace support payments, Self-isolation Support scheme payments and self-isolation support grants are taxable.