Incapacity benefit for dependant-is this taxable?

johnsmi

Hi,

I am currectly receiving incapacity for myself and also receive an extra £50 approx for my partner because we had a child 2 years ago. According to the above should the extra ib for my partner beause of having a baby be taxable?, I was reading the below thread and picked up on the post from Chrismac1

https://forums.moneysavingexpert.com/discussion/2808114

I think for the first year the p60 showed taxable IB about 2k less that we receive, but just would like to know if the extra ib is taxable? as they say total ib is taxable now

Thanks very much for your kind help.

John

chrismac1

Income Tax (earnings and pensions act) 2003:

676Increases in respect of children E+W+S+N.I.

No liability to income tax arises on a part of a taxable benefit listed in Table A which is attributable to an increase in respect of a child.

Unless contradicted by HMRC, this is still on the statute books.

johnsmi

Thanks Chrismac1 for your kind help on this. I did a google on the relavant legislation and it seems quite complicated especially since its my partner who gets the extra money (because she had a child) so I'm not sure if some of the ib is not taxable. I know that for year 08/09 the p60 from DWP give me a taxable income of less than 2 k that I actually received but 09/10 the p60 showed the full amount of ib taxable. Im just wondering would the tax people know about this if I ring them or if its better to ring the dwp to clarify the p60

John

chrismac1

I wouldn't be too confident of the folk manning the helplines for HMRC having too much of a clue here. I am not blaming them. I've had to look this up in my tax manuals and the HMRC site - one hope for this new Government is that my reducing the tax code (which doubled under Labour) they can simplify things and reduce the work needed within HMRC as a result.

johnsmi

Just seen this after doing a google so it seems ib is taxable for my partner (even though its because she qualfies because she had a baby)

http://www.hmrc.gov.uk/manuals/eimanual/eim76180.htm

john

dmg24

chrismac1 wrote: »

Income Tax (earnings and pensions act) 2003:

676Increases in respect of children E+W+S+N.I.

No liability to income tax arises on a part of a taxable benefit listed in Table A which is attributable to an increase in respect of a child.

Unless contradicted by HMRC, this is still on the statute books.

The dependent addition is not given in respect of a child, or indeed of having a child. johnsmi is correct, it is taxable.