Tax incentives for assisting Ukrainian refugees
The Russia-Ukraine conflict has displaced millions of people. The government has now announced details of a tax-exempt scheme aimed at those who wish to offer accommodation to refugees. What’s the full story?
In a bid to help people fleeing from Ukraine, the government is offering to pay UK residents £350 per month under the Homes for Ukraine Scheme if they can provide at least six months’ stable accommodation to Ukrainian refugees. Payments will be made by the local authority and will be exempt from income tax, NI contributions and corporation tax. The tax exemption applies retrospectively with effect from the date the first payments to sponsors will be made. Furthermore, the payments will not affect entitlement to state benefits. The government also intends to legislate within Finance Bill 2022/23 so that those companies that currently qualify for the existing reliefs available from the annual tax on enveloped dwellings and the 15% rate of SDLT used in a property development or property trading business or let on a commercial basis will continue to be able to claim the relief while the dwellings are being used temporarily under this scheme.
The payment will be made for up to twelve months, resulting in £4,200 tax free income. Whilst a spare room could be let for £7,500 per year tax free (under the rent a room scheme), this tax-free payment could assist those struggling to find tenants or willing to have lodgers to help this humanitarian crisis. Further information on the scheme can be found here.
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