Carers and taxable benefits

If you are an unpaid carer in receipt of taxable benefits, you need to add together taxable benefits with any other income you have (such as permitted hours work) to see if you are taxable on your total income.  If you are employed, your PAYE tax code may need to take account of the taxable benefit you receive – so check your tax code carefully, and make sure HMRC knows about both your employment and any taxable benefits (see http://taxaid.org.uk/situations/employee).

Make sure you do not include non-taxable benefits in your taxable income for either income tax (if you need to complete a tax return) or tax credits. For instance, income-based ESA is not taxable.

Tax credits (http://taxaid.org.uk/info/tax-credits ) are based on your taxable income, so if you work and receive a taxable benefit this could affect your tax credit award. For example, Carer’s Allowance and contributions-based ESA are taxable and will use up some of your tax free personal allowance as well as counting as income for tax credit purposes.