Is the jury service loss of earnings allowance taxable?

Full answer

When someone is called for jury service in the UK, they can claim a loss of earnings and benefits allowance from HM Courts and Tribunals Service (HMCTS) to compensate for time away from paid work, alongside allowances for travel and subsistence (food and drink) costs incurred while attending court. **Why the allowance is not taxable** The jury service loss of earnings allowance is a compensatory payment for lost income and expenses incurred purely because of a civic duty imposed by law, rather than payment for work done or a reward from an employer. HMRC treats it as outside the scope of Income Tax -- it does not need to be reported on a Self Assessment tax return, does not use up any part of the Personal Allowance, and is not subject to National Insurance either. **How the allowance works in practice** HMCTS sets daily rate caps for loss of earnings (with different rates depending on how many days you have already served, since longer jury service periods away from work can qualify for a higher daily cap after the first ten days), and separate allowances for travel and food. You (or your employer, if arrangements are made directly) must provide evidence of lost earnings, such as a letter or certificate from your employer confirming your normal pay and any amount continued during jury service, to claim the correct amount. **What happens if your employer continues paying your salary** Many employers choose to continue paying an employee's normal salary in full during jury service, as a goodwill gesture or under company policy, rather than leaving the employee to rely solely on the HMCTS allowance (which is often lower than normal full-time pay, especially for higher earners, since the daily caps do not necessarily match every salary level). Where this happens, the employee's normal salary continues to be taxed as usual through PAYE, exactly as if they were at work -- there is no special tax exemption for salary continued during jury service, even though the reason for the absence is a legal civic duty. **Avoiding double payment** Because an employee cannot normally be compensated twice for the same lost time (once by the employer through continued salary, and again by the court through the loss of earnings allowance), many employers ask the employee to either not claim the HMCTS loss of earnings allowance at all (since the employer is covering it through continued pay), or to claim it and then pass the court payment on to the employer to offset the cost of having continued to pay full salary. Employers cannot force an employee to hand over the allowance, but many employment contracts or jury service policies specify this arrangement, and it is common practice. **Self-employed jurors** Self-employed people called for jury service can also claim the loss of earnings allowance for time away from their business, based on evidence of their usual self-employed income (such as accounts or an accountant's letter). This allowance remains tax-free in the same way, and is separate from, and does not affect, how their ordinary self-employed trading profits for the rest of the tax year are calculated and taxed. **Worked example** An employee normally earning £180 a day is called for two weeks of jury service. Their employer does not continue to pay salary during this period, so the employee claims the HMCTS loss of earnings allowance, capped at a lower daily rate than their normal pay for the first ten days of service. The full amount received from HMCTS is tax-free and does not need to be reported to HMRC, even though it does not fully replace what the employee would have earned at work.