The Chancellor announced new measures on the taxation of new social security benefits and an increase in Qualifying Care relief for carers in his Spring 2023 Budget.
Taxation of new social security benefits
From 6 April 2023
- A new power that enables the tax treatment of new payments or new top-up welfare payments, introduced by the devolved administrations to be confirmed as taxable social security income through secondary legislation.
Section 660 of ITEPA 2003 details the taxable UK benefits in Table A.
Section 677 of ITEPA 2003 details the UK social security benefits wholly exempt from Income Tax in Table B.
New benefits can be added to Table A in ITEPA 2003, confirming they are taxable as social security income by secondary legislation. This power is intended for use on new benefits introduced by the devolved administrations.
Increase in Qualifying Care Relief
From April 2023
- This measure increases the amount of the Income Tax qualifying care relief available to foster carers and shared lives carers, and automatically increases the relief each year in line with inflation.
Qualifying Care Relief (QCR) is a tax simplification available to carers that provides specific tax relief for care income, as a replacement for apportioning and calculating full deductions for expenses. The relief allows carers to keep simpler records for their care activities and use a simpler method of filling in the self-employed pages of their tax returns.
This increase sets qualifying care relief for the tax year 2023 to 24 as follows:
- The carer’s share of a fixed amount of £18,140 (2022-23 £10,000), plus
- Weekly amounts for each cared-for child or adult:
- £375 (2022-23 £200) for each child under 11 years of age.
- £450 (2022-23 £250)for each child 11 years of age or older.
- £450 (2022-23 £250) for each adult.
The measure also aims to simplify carers’ tax affairs by allowing more carers to use the simpler method of completing their self-assessment returns available where care income is completely covered by QCR. This increase ensures that the simpler QCR method more accurately reflects the costs of caring, which could otherwise be claimed under the more complex profit method of calculating care income.
Tax treatment of payments from the Welsh Government’s Jobs Growth Wales Plus scheme
From 1 April 2022
- Spring Finance Bill 2023 will exempt payments of the training allowance under the Welsh Government’s Jobs Growth Wales Plus scheme from Income Tax, with retrospective effect from 1 April 2022.
- The scheme was introduced by the Welsh Government on 1 April 2022, to replace Traineeships and Jobs Growth Wales.
Useful guides on this topic
Spring Budget 2023: at a glance
Freeview summary of the measures announced in the Budget 2023
External links
Budget announcement: Income Tax: Taxation of new benefits
Policy paper: Increase in Qualifying Care Relief
Policy Paper Income Tax: Tax treatment of payments from the Welsh Government’s Jobs Growth Wales Plus scheme.
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