Income Tax (Earnings and Pensions) Act 2003 section 661

Taxable social security income

Section 661 identifies which UK social security benefits are taxable and explains how the taxable amount is calculated for a given tax year.

• The section applies to specific taxable benefits: bereavement allowance, carer's allowance, carer's allowance supplement, contributory employment and support allowance, incapacity benefit, income support, and certain Northern Ireland welfare supplementary payments
• The taxable amount is the full amount of the benefit that accrues in the tax year, not the amount actually received or paid out during that year
• The accruals basis means that even if a payment is delayed or paid in arrears, the income is still taxed in the year to which it relates
• Not all social security benefits listed elsewhere in the legislation follow this rule — certain benefits such as statutory sick pay, statutory maternity pay, statutory adoption pay, statutory paternity pay, and jobseeker's allowance are taxed under different provisions