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Wednesday, 3 October 2023

Which state benefits to report when making a tax credits claim

The amount of tax credits you get depends on your income. Some state benefits, such as Bereavement Allowance, count as income when you make a tax credits claim. You'll need to include the amount you've had on your claim form.

What to include

You'll need to enter the amount of any taxable state benefits you've had in the last tax year on your claim form. A tax year runs from 6 April one year to 5 April the next.

Some types of taxable benefit need to go in the 'taxable social security benefits' box. Others need to go in the 'other income' box.

If any tax was taken off your benefit, include the amount that was due to you before tax.

The sections below tell you what you need to include and where.

What to include in 'taxable social security benefits'

If you've had any of the benefits listed below, include the total amount in the 'taxable social security benefits' box:

  • Bereavement Allowance
  • Carer's Allowance (this used to be called Invalid Care Allowance) - also include any Child Dependency increase
  • Incapacity Benefit paid after the first 28 weeks of incapacity, together with any Child Dependency increase - but don't include it if you claimed it before 1995 and have received it ever since
  • taxable Income Support - it's only taxable if you were in a couple, and the person receiving the Income Support was on strike
  • contribution-based Employment and Support Allowance – don’t include it if it is the income-related allowance
  • contribution-based Jobseeker’s Allowance - don’t include it if it is the income-based allowance

What to include in 'other income'

If you've had any of the benefits listed below, include the total amount in the 'other income' box' - but remember to include other income too:

  • State Pension
  • Industrial Death Benefit
  • Widowed Mother's Allowance
  • Widowed Parent's Allowance
  • Widow's Pension

If the total amount of your other income (including any of these benefits) was £300 or less, don't include it on your claim form. But there are exceptions to this rule - follow the link below to find out how to work out your other income.

What not to include on your claim form

Don't include on your claim any benefits you get which aren't taxable like:

  • Child Benefit
  • Attendance Allowance
  • Disability Living Allowance
  • Housing Benefit
  • Council Tax Benefit

For help working out which benefits to include, use the worksheet in the notes that came with your tax credits claim form or renewal pack. Or you can call the Tax Credit Helpline.

Effect of tax credits on Housing Benefit and Council Tax Benefit

If you're on Housing Benefit or Council Tax Benefit, any tax credits you receive will be taken into account as income. This means that the amount you get will be reduced to take into account this additional income - but overall you'll still be better off.

It's very important to tell your local council how much you're getting in tax credits. Otherwise you may get an overpayment of Housing Benefit or Council Tax Benefit and then have to pay it back.

If you get non-UK benefits

You might get a social security benefit from another country, for example like:

  • Unemployment Benefit
  • Children’s Allowance

How you enter this on your claim form depends on the type of benefit you get.

If the non-UK benefit you get is counted as 'income' you will need to enter it on your claim form under 'other income'. Examples of benefits that count as income include benefits paid because someone close to you has died or you're unemployed.

If the benefit you get is a ‘family benefit’ for example Children’s Allowance or Family Income Supplement, don’t enter it on your claim form. You should send in a separate note with your claim instead.

Provided by HM Revenue and Customs

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