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). There are also specific tax reliefs and exemptions available to disabled employees (see ).
The following are the only taxable state benefits:
■widowed parent’s allowance;
■carer’s allowance, carer support payment and carer’s allowance supplement;
■‘new style’ and contributory employment and support allowance;
■invalidity allowance (paid with a state pension);
■industrial death benefit;
■jobseeker’s allowance;
■state pension; and
■statutory adoption pay, statutory maternity pay, statutory neonatal pay, statutory paternity pay, statutory shared parental pay, statutory parental bereavement pay and statutory sick pay.