Income Tax (Earnings and Pensions) Act 2003 section 665

Exempt unless payable to a person involved in a trade dispute

Section 665 establishes that income support and relevant welfare supplementary payments are generally exempt from income tax, unless connected to a trade dispute affecting one member of a couple.

• Income support is exempt from income tax unless it is payable to one member of a couple (the claimant) and the trade dispute rules apply to the claimant but not to their partner
• If both members of the couple are involved in a trade dispute, there is no taxable income support — the tax charge only arises where one partner is on strike and the other is not
• Relevant welfare supplementary payments are only taxable if they relate, in whole or in part, to a period when the claimant was prevented from receiving jobseeker's allowance because of the trade dispute rules
• Where only part of a welfare supplementary payment relates to a trade dispute period, the portion that does not relate to that period remains exempt from income tax