Covid £500 payment: Claimants may be taxed on the support they receive – full details

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Test and Trace Support Payment rules allow workers to receive a £500 payment if they’ve been economically or personally affected by coronavirus. This payment can be awarded to those whose working life cannot adapt well to the pandemic.

People may get a £500 payment if either:

  • They have been told to self-isolate because of coronavirus and they cannot work from home
  • They’re the parent or guardian of a child who has been told to self-isolate and they need to take time off to look after them

To receive the payment, a person must be employed or self-employed.

Claims for the money must be made within 42 days of the persons or their child’s first day of self-isolation.

Where a claimant is employed, they’ll need to pay tax on the payment if they go over their tax-free personal allowance, which is currently sitting at £12,570.

Where this is due, a person’s tax code will be changed to collect the tax.

Claimants will not pay National Insurance contributions on the payment.

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For the self-employed, the payment must be reported on a Self Assessment tax return.

This payment is only available for people in England but there are similar schemes in Wales, Scotland and Northern Ireland.

Should people be told to self-isolate by the NHS Test and Trace or the NHS COVID-19 apps, they can apply for the payment if they’ll lose income because they cannot work from home.

This, again, affects employed workers and the self-employed.

Additionally, the claimant or the partner they live with must get one of the following benefits:

  • Universal Credit
  • Working Tax Credit
  • Income-based Employment and Support Allowance
  • Income-based Jobseeker’s Allowance
  • Income Support
  • Housing Benefit
  • Pension Credit

Claims for these payments must be made through local councils.

Each council will tell claimants what evidence they need to apply but generally people may need to provide payslips, bank statements and evidence that they’ve been told to self-isolate.

Recently, the Government released details on a new service designed to support quarantine compliance, which may impact those affected by the Test and Trace service.

As the Home Office detailed on April 12: “The Government has launched a service to carry out further visits on people who have a duty to quarantine following international travel.

“It is still illegal to holiday overseas and those entering the country following international travel must quarantine for a period of 10 days at a managed quarantine site or the address listed on their passenger locator form.

“Compliance is critical to reduce the risk of Variants of Concern entering the UK.

“Those quarantining at home may be visited by staff employed on behalf of the NHS Test and Trace service.

“These checks will be in addition to those already carried out by police officers, who make up to 1,000 home visits per day.

“NHS Test and Trace staff will not have any enforcement powers, however, a referral will be made to the police if NHS Test and Trace staff have a reason to believe that an individual may be breaching quarantine rules. Officers will consider enforcement action following further investigation.

“Individuals who fail to comply could be issued with a fixed penalty notice, starting at £1,000 and increasing up to £10,000 for repeat offences.”

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