Homes for Ukraine payments to be non-taxable
The government has pledged that the Homes for Ukraine Sponsorship Payment, to be given to people who open their homes to Ukrainian refugees, will be exempt from income tax and corporation tax and that the payment will not be chargeable to national insurance contributions (NIC).
The payment will be made by local authorities to sponsors under the Homes for Ukraine Scheme. However, as the payments will be treated as non-taxable income, landlords will be unable to claim a tax deduction for related expenditure.
The legislation will be retrospective with effect from the date the first payments to sponsors are made. HMRC will not collect any tax that may have been due before the legislation takes effect.
A government statement also confirms that legislation has been introduced to ensure that the payments will be disregarded for the purposes of calculating tax credits. The Homes for Ukraine scheme: frequently asked questions webpage indicates that the payments will not affect benefit entitlement or council tax discounts.