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Maternity Allowance - still not taxable?


Most recent posts about Maternity Allowance are from 2009 so just checking things haven't changed. I have a client who is convinced that only the first £100 of her weekly MA payment is tax exempt but I belief the full amount is outside the scope of tax. Am I right? 

Many thanks,


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25th Jan 2012 10:19

I believe that the full amount is outside the scope of tax. certainly never heard of the first £100 tax exemption thing...

Thanks (1)
25th Jan 2012 11:32

Tax credits

The Maternity Allowance is definitely 100% tax free.

The £100 tax exemption relates to tax credits. If you receive Maternity Pay then for each week you receive Maternity Pay in the tax year, £100 per week should be deducted from your income to work out your employment income for tax credit purposes.

However this is not the case for the Maternity Allowance where it is ignored completely for tax credit purposes.

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