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Test and Trace Support Payment

Question for Treasury

UIN 105379, tabled on 19 October 2020

To ask the Chancellor of the Exchequer, whether he plans to exempt the covid-19 self isolation grant from income tax.

Answered on

22 October 2020

The UK Government introduced the Test and Trace Support Payment scheme in England to support those on low incomes who cannot work from home and are therefore financially affected by self-isolating.

As these payments – and payments from equivalent schemes in the devolved administrations – are linked to employment, the legislative default is that these payments are subject to income tax and National Insurance Contributions. This is in line with the tax treatment of other COVID-19 support payments, such as the Self-Employment Income Support Scheme and the Coronavirus Job Retention Scheme.

However, the UK Government has granted the Test and Trace Support Payment in England an exemption from National Insurance Contributions in order to reduce the administrative burden on both local authorities and employers. The Government is working with the devolved administrations to extend this National Insurance Contributions exemption to their equivalent schemes.

Answered by

Treasury
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