SI 2020/941 – The Tax Credits (Coronavirus, Miscellaneous Amendments) (No. 2) Regulations 2020

Released 04 September 2020

SI 2020/941 amends SI 2002/2005 and SI 2002/2006 reflecting HM Treasury direction of 25 June 2020 and FA 2020, Sch. 16 from 25 September 2020.

The Tax Credits (Coronavirus, Miscellaneous Amendments) (No. 2) Regulations 2020 amend the Tax Credits (Definition and Calculation of Income) Regulations 2002 (SI 2002/2006) and the Working Tax Credit (Entitlement Maximum Rate) Regulations 2002 (SI 2002/2005). SI 2002/2006, reg. 6, which defines ‘trading income’ for tax credit purposes, is amended following SI 2020/534 (which previously amended reg. 6 to include coronavirus support scheme payments or grants as trading income) and FA 2020, s. 102 and Sch. 16 (taxation of coronavirus support payments) which together resulted in the income of some claimants being taken into account twice. The amendments ensure that such income is only taken into account once. SI 2002/2006, reg. 19 (general disregards in the calculation of income) is also amended to reflect that payments under the NHS and Social Care Coronavirus Life Assurance Scheme are not income for tax credits purposes and therefore do not require to be disregarded and to reflect that payments made under the NHS Test and Trace Self-Isolation Payment Scheme are disregarded in calculating income for tax credit purposes. The definition of ‘furloughed employee’ in SI 2002/2005, reg. 2 is amended to reflect the further direction given by the Chancellor on 25 June 2020. The regulations come into force on 25 September 2020.

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