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Tax Glossary - Income Tax

Home > Tips > Glossary > Non Taxable Income

Non-taxable income

Child related

  • Child Benefit
  • Child Tax Credit
  • Child Trust Fund
  • Maintenance payments received given by a civil partner or spouse
  • Maternity Allowance
  • Maternity grants received by Sure Start
  • One-parent Benefit only if a claim was made before April 1997
  • Childcare vouchers – limits do apply
  • Guardian’s Allowance
  • Adoption allowances received through a local authority or some adoption agencies
  • Foster care receipts – limits do apply
  • Additional child dependency payments paid with State Retirement Pension Incapacity Benefit Widowed Parent’s  and Carer’s Allowance
  • Clothing and School uniform grants
  • Fares for School journeys
  • Young Person's Bridging Allowance

Work related

  • Employment and Support Allowance which are income related
  • Training courses which are work related
  • General health costs including prescription costs
  • Unemployment pay from trade unions and strike pay strike pay
  • Student loans
  • Educational grants including higher education student support and maintenance allowance
  • Back to Work Bonus
  • Compensation for the loss of a job, contractual and statutory redundancy payments up to the first £30,000 received.
  • Insurance policy benefits for unemployment paid to cover living costs such as Payment protection and mortgage protection insurance.

Personal Finance

  • The interest supplement part of a tax rebate through PAYE
  • Working Tax Credit
  • NS&I - National Savings and Investment Certificates
  • ISA’S – Individual Saving Accounts
  • Particular profits and bonuses from life assurance policies
  • National Lottery winnings
  • Betting for example football pools and horse racing
  • Prizes received from Premium bonds
  • Social Care Crisis and budgeting loans
  • Social Care Fund Community care grants
  • Tax Reserve Certificates
  • Purchased annuities – capital element of the amount you receive
  • Investment bonds and Insurance policy withdrawals up to 5% of the amount initially invested


Particular pensions including:-

Armed Forces disability pensions

Voluntary pensions which are not associated to a previous employer and to a past job and are paid into on an annual basis

Retirement pension granted due to an injury at work

  • Pension payments made as a lump sum up to a certain limit of the capital value
  • Pension Credit compensation taken out between 29/04/1988 and 30/06/1994
  • Interest for mis-sold personal pensions taken out between 29/04/1988 and 30/06/1994
  • War Disablement Pension
  • War Widow’s/Widower's pension
  • War orphan’s pension


  • Personal injury compensation or damages in any form and any interest incurred up to the time of a court judgement
  • Financial loss allowance for Juror’s who are employed
  • Bereavement payments
  • Funeral expenses payments

House related

  • Local Authority home improvement grants
  • Local Authority housing grants
  • Housing Benefit
  • Council Tax Benefit
  • Warm Front Grant in England
  • Warm Homes Grant in Northern Ireland
  • Energy Assistance Package in Scotland
  • Winter Fuel Payments
  • Cold Weather Payments
  • Rent a Room scheme  up to the £4250 tax free limit
  • Over 75’s TV licence payments

Illness and Disability

  • Insurance policy benefits for sickness or disability paid to cover living costs such as long term care insurance and permanent health insurance
  • Disability Living Allowance
  • Short-term lower rate Incapacity Benefit paid for the first 28 week period
  • Industrial Injuries Exceptionally Severe Disablement Allowance and Disablement benefit
  • Industrial Injuries Constant Attendance and Reduced Earnings Allowance
  • Severe Disablement Allowance for claimants who made a claim before April 2001
  • Hospital Travel Scheme travelling expenses

< Back to Glossary is here to provide you with FREE independent tax information to help you save money and pay the right amount of tax. does not provide tax advice and the information provided is to help give people a better understanding and does not constitute tax advice.

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