What income is exempt from tax?

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The following income is exempt from UK tax:

Income from National Savings (NS & I) Certificates (but interest on a National Savings Account is taxable)
Winnings on Premium Bonds. ITTOIA 2005, s.692
Any income from betting, gaming or lotteries
Scholarship awards
Income from ISAs (individual savings accounts). ITTOIA 2005, s.776; SI 1998/1870
Dividends paid on the first £200,000 of Venture Capital Trust shares acquired in any tax year are also exempt from income tax. ITTOIA 2005, s.709
Housing benefit and winter fuel allowances for pensioners. ITEPA 2003, s.677 (see Are Benefits Taxable blog – Adam, do link to that one)
Child benefit is not taxable although a high income child benefit charge applies where a recipient or their partner has adjusted net income in excess of £50,000.

If your employer or personal company provides any the following, these may be exempt from tax subject to conditions:
Bicycle used for commuting
Mobile phone (must be in employer or company name and be a business contract)
Employer pension contributions
Child care – subject to fairly low limits

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.

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