In a written statement, the UK government has confirmed its intention to exempt the Homes for Ukraine Sponsorship Payment (made by local authorities to sponsors under the Homes for Ukraine Scheme) from income tax and corporation tax. Legislation will be introduced in the next Finance Bill and will have retrospective effect from the date the first payments to sponsors are made. Payments will also not be chargeable to NICs.
HMRC will not collect any tax that may have been due on payments made to sponsors before the date the legislation takes overriding effect.
As the payments will be treated as non-taxable income, any expenses that could otherwise have been offset against taxable income will not be allowable as a tax deduction.
Companies that currently qualify for the existing reliefs from annual tax on enveloped dwellings and the 15% rate of stamp duty land tax for dwellings used for commercial purposes, will continue to be able to claim relief while the dwellings are being used under the Homes for Ukraine Scheme.
The Council Tax (Discount Disregards and Exempt Dwellings) (Amendment) (England) Regulations, SI 2022/439 ensure that households will not lose council tax discounts or exemptions as a consequence of hosting a sponsored individual or family under the Homes for Ukraine Scheme. The Regulations came into force on 12 April 2022.
The government has also introduced legislation to disregard payments made under the Scheme when calculating income for the purposes of tax credits (see SI 2022/346).
In a written statement, the UK government has confirmed its intention to exempt the Homes for Ukraine Sponsorship Payment (made by local authorities to sponsors under the Homes for Ukraine Scheme) from income tax and corporation tax. Legislation will be introduced in the next Finance Bill and will have retrospective effect from the date the first payments to sponsors are made. Payments will also not be chargeable to NICs.
HMRC will not collect any tax that may have been due on payments made to sponsors before the date the legislation takes overriding effect.
As the payments will be treated as non-taxable income, any expenses that could otherwise have been offset against taxable income will not be allowable as a tax deduction.
Companies that currently qualify for the existing reliefs from annual tax on enveloped dwellings and the 15% rate of stamp duty land tax for dwellings used for commercial purposes, will continue to be able to claim relief while the dwellings are being used under the Homes for Ukraine Scheme.
The Council Tax (Discount Disregards and Exempt Dwellings) (Amendment) (England) Regulations, SI 2022/439 ensure that households will not lose council tax discounts or exemptions as a consequence of hosting a sponsored individual or family under the Homes for Ukraine Scheme. The Regulations came into force on 12 April 2022.
The government has also introduced legislation to disregard payments made under the Scheme when calculating income for the purposes of tax credits (see SI 2022/346).
