Which payslip items are not taxable in United Kingdom?

Article author
Mika Komatsuzaki

In the United Kingdom, employees do not have to pay tax on benefits and expenses covered by concessions or exemptions such as:

  • Income from tax-exempt accounts, like Individual Savings Accounts (ISAs) and National Savings Certificates
  • Dividends from company shares under your dividends allowance
  • Necessary business expenses can be deducted from employment income and are not taxable if paid for or reimbursed by the employer
  • Some state benefits
    • The most common state benefits you do not have to pay Income Tax on are:
      • Attendance allowance
      • Bereavement support payment
      • Child benefit
      • Child tax credit
      • Disability Living Allowance (DLA)
      • Free TV licence for over-75s
      • Guardian’s allowance
      • Housing benefit
      • Income support. Though you may have to pay tax on income support if you’re involved in a strike
      • Income-related Employment and Support Allowance (ESA)
      • Industrial injuries benefit
      • Lump-sum bereavement payments
      • Maternity allowance
      • Pension credit
      • Personal Independence Payment (PIP)
      • Severe disablement allowance
      • Universal credit
      • War widow’s pension
      • Winter fuel payments and Christmas bonus
      • Working tax credit

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