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Tax and NIC treatment of self-isolation payments

Certain benefit claimants can claim a lump-sum payment of £500 if they have been instructed to self-isolate but can’t work from home. How does this affect their tax and benefits?

29th Jan 2021
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Coronavirus benefits
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Regional differences

The nations making up the UK each have a different ‘test and trace’ Covid-19 procedure. This is a result of health being a devolved issue, so there are four different approaches and app names:

Each of the products in the UK nations endeavours to contain the spread of the Covid-19 by tracing contacts and advising that they should self-isolate, but there are differences.

Support payments

England, Wales and Scotland introduced support payments that can be applied for if the app advises a period of self-isolation, which all have different names:

At the time of writing, Northern Ireland has yet to introduce such a payment.

All of the support payments have the same basic concept: a payment of £500 to be made by the local authority upon application if the claimant meets the eligibility criteria. Research by BBC Newsnight has found that only 24% of applicants qualified for the payment.

National insurance

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