Tax Credits Citation and commencement 1 These Regulations may be cited as the Tax Credits (Coronavirus, Miscellaneous Amendments) Regulations 2020 and come into force on 23rd May 2020. Amendment of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 2 1 The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 are amended as follows. 2 In regulation 2 (interpretation) at the appropriate place insert— “coronavirus” means severe acute respiratory syndrome coronavirus 2; “Coronavirus Job Retention Scheme” means the scheme of that name established under the direction given by the Chancellor of the Exchequer under section 76 of the Coronavirus Act 2020 on 15th April 2020 (as that Scheme has effect from time to time); “coronavirus-impacted worker” has the meaning given by regulation 7E(3) ; and “furloughed employee under the Coronavirus Job Retention Scheme” means a person who is within paragraph 6.1 of the Schedule to the direction given by the Chancellor of the Exchequer under section 76 of the Coronavirus Act 2020; . 3 In regulation 4 (entitlement to basic element of Working Tax Credit: qualifying remunerative work)— a in paragraph (1A) after sub-paragraph (d) insert— da regulation 7E applies— i where a person, or in the case of a joint claim, one or both persons, reduces the hours worked, including a reduction to nil, to the extent that that person, or those persons, no longer satisfy the Second condition in paragraph (1); ii any reduction in hours is as a consequence of coronavirus; and iii any reduction in hours is temporary; ; and b in paragraph (4)— i omit the “and” at the end of sub-paragraph (a); ii at the end of sub-paragraph (b) after the comma insert “and”; and iii after sub-paragraph (b) insert— c any period of absence from work due to taking emergency volunteering leave under Schedule 7 to the Coronavirus Act 2020 , . 4 In regulation 7D (ceasing to undertake work or working for less than 16, 24 or 30 hours per week) after paragraph (2) insert— 3 This regulation does not apply to a person who is either— a a furloughed employee under the Coronavirus Job Retention Scheme ; or b a coronavirus-impacted worker. . 5 After regulation 7D insert— Alteration in hours worked due to coronavirus 7E 1 For the purposes of the conditions of entitlement in this Part, a person to whom paragraph (2) applies is treated as being engaged in qualifying remunerative work during the period that that person is either— a a furloughed employee under the Coronavirus Job Retention Scheme; or b a coronavirus-impacted worker. 2 This paragraph applies to— a a person, whether or not a member of a couple, who is a furloughed employee under the Coronavirus Job Retention Scheme; b a person (A), whether or not a member of a couple, who was engaged in qualifying remunerative work for no less than 16 hours per week— i who starts to work less than 16 hours per week and that reduction in hours is due to coronavirus; ii who is notified by A’s employer that A is not required to work any hours due to coronavirus, but A’s employer has not made any application under the Coronavirus Job Retention Scheme in respect of A; or iii who is unable to work as a consequence of shielding; c a person (B), whether or not a member of a couple, who satisfies paragraph (c) of the first variation or paragraph (b) of the second variation of the Second condition in regulation 4(1) (qualifying remunerative work) and who is engaged in qualifying remunerative work for not less than 30 hours per week— i who starts to work less than 30 hours per week and that reduction in hours is due to coronavirus; ii who is notified by B’s employer that P is not required to work any hours due to coronavirus, but B’s employer has not made any application under the Coronavirus Job Retention Scheme in respect of B; or iii who is unable to work as a consequence of shielding; or d one or both members of a couple who satisfy paragraph (a) of the third variation of the Second condition in regulation 4(1) and who are engaged in qualifying remunerative work— i who reduce their hours (including a reduction to nil) so that they no longer meet the condition that one member of the couple works no less than 16 hours per week and the aggregate number of hours for which the couple are engaged in qualifying remunerative work is not less than 24 hours per week and any reduction in hours worked is as a consequence of coronavirus; or ii who are unable to work as a consequence of shielding. 3 For the purposes of this regulation, a person is a coronavirus-impacted worker if that person is— a an employed person who is within paragraph (2)(b), (c) or (d); or b a self-employed person who is within paragraph (2)(b)(i) or (iii), paragraph (2)(c)(i) or (iii) or paragraph (2)(d). 4 Where paragraph (2)(a) applies, at the date at which a person (P) ceases to be a furloughed employee under the Coronavirus Job Retention Scheme if— a during the period of eight weeks beginning with the date on which P ceases to be a furloughed employee under that Scheme, the hours that P works do not satisfy the variation in the Second condition of regulation 4(1) which P satisfied immediately before P was furloughed under that Scheme, but it is P’s intention that at the end of that period P will satisfy that variation— i where P does satisfy that variation at the end of that eight-week period, P will be treated as meeting the conditions of entitlement for the purposes of this Part; and ii where P does not satisfy that variation at the end of that eight-week period, for the purposes of the conditions of entitlement for the purposes of this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after the end of that eight-week period; b at any time during the period of eight weeks beginning with the date on which P ceases to be a furloughed employee under that Scheme— i the hours that P works are permanently reduced so that P is not able to satisfy the variation in the Second condition of regulation 4(1) which P satisfied immediately before P became a furloughed employee under that Scheme; or ii P ceases to undertake work, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after the reduction in hours or the cessation of employment; c P does not undertake work, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after P ceases to be a furloughed employee under that Scheme; or d there is a permanent reduction in the hours that P works such that P is unable to satisfy the variation in the Second condition of regulation 4(1) which P satisfied immediately before P became a furloughed employee under that Scheme, for the purposes of the conditions of entitlement for this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after P ceases to be a furloughed employee under that Scheme. 5 For the purposes of paragraph (4) a person ceases to be a furloughed employee under the Coronavirus Job Retention Scheme when that Scheme no longer applies in respect of that person. 6 Where paragraph (2)(b), (c) or (d) applies, at the date where a person (P) ceases to be a coronavirus-impacted worker, if— a during the period of eight weeks beginning with the date on which P ceases to be a coronavirus-impacted worker, the hours that P works do not satisfy the variation in the Second condition of regulation 4(1) which P satisfied immediately before P became a coronavirus-impacted worker, but it is P’s intention that at the end of that period P will satisfy that variation— i where P does satisfy that variation at the end of that eight-week period, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work during that eight-week period; and ii where P does not satisfy that variation at the end of that eight-week period, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after the end of that eight-week period; b at any time during the period of eight weeks beginning with the date on which P ceases to be a coronavirus-impacted worker— i the hours that P works are permanently reduced so that P is not able to satisfy the variation in the Second condition of regulation 4(1) that P satisfied immediately before P became a coronavirus-impacted worker; or ii P ceases to undertake work, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after the reduction in hours or after P ceases to work; or c P does not undertake work, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after P ceases to be a coronavirus-impacted worker; d there is a permanent reduction in the hours that P works such that is unable to satisfy the variation in the Second condition of regulation 4(1) which P satisfied immediately before P became a coronavirus-impacted worker, for the purposes of the conditions of entitlement in this Part, P will be treated as being engaged in qualifying remunerative work for the four-week period which begins immediately after P ceases to be a coronavirus-impacted worker. 7 For the purposes of paragraph (6) if— a a person is within paragraph (2)(b)(i) or (ii), paragraph (2)(c)(i) or (ii) or paragraph (2)(d)(i), that person ceases to be a coronavirus-impacted worker on the day that the Coronavirus Job Retention Scheme ceases; and b a person is within paragraph (2)(b)(iii), paragraph (2)(c)(iii) or paragraph (2)(d)(ii), that person ceases to be a coronavirus-impacted worker the day after the day on which the period for which that person was shielding ends. 8 In this regulation a person (P) is shielding, or required to shield, if P, or another person living in the same household as P, has been notified by the National Health Service, their specialist or their general practitioner that they are clinically extremely vulnerable due to coronavirus. . 6 In regulation 10 (30 hour element) — a in paragraph (1) after “per week” but before the full stop insert “, except where paragraph (4) applies”; and b at the end insert— 4 This paragraph applies where— a the claimant or, where it is a joint claim, one of the claimants is, or both of the claimants are, impacted by coronavirus; b during the period of the Coronavirus Job Retention Scheme, the claimant undertakes work for no more than 29 hours per week; and c immediately before the date on which the claimant became impacted, the maximum rate did not include a 30 hours element. 5 In this regulation a person is impacted by coronavirus if that person is— a a furloughed employee under the Coronavirus Job Retention Scheme; or b a coronavirus-impacted worker. . Amendment of the Tax Credits (Definition and Calculation of Income) Regulations 2002 3 1 The Tax Credits (Definition and Calculation of Income) Regulations 2002 are amended as follows. 2 In regulation 2 (interpretation) in paragraph (2) at the appropriate place insert— “coronavirus” means severe acute respiratory syndrome coronavirus 2; ; “coronavirus support scheme” means— any scheme in relation to which HMRC have functions by virtue of a direction made under section 76 of the Coronavirus Act 2020 (HMRC functions) ; the scheme known as the Small Business Grant Fund established in response to coronavirus; any scheme established in the tax year 2020-2021 in response to coronavirus to support the fishing industry; the scheme known as the Retail, Hospitality and Leisure Grant Fund established in response to coronavirus; the scheme known as the Newly Self-Employed Hardship Fund established by the Scottish Ministers in the tax year 2020-2021 in response to coronavirus;” and any other support scheme established in the tax year 2020-2021 in response to coronavirus; and “Scottish Ministers” has the meaning given by section 44(2) of the Scotland Act 1998 . . 3 For regulation 6 (trading income) substitute— Trading Income 6 1 The claimant’s trading income is— a the amount of the claimant’s taxable profits for the tax year from— i any trade carried on in the United Kingdom or elsewhere; and ii any profession or vocation the income from which does not fall under any other provisions of these Regulations; and b any grant or any sum paid to the claimant under a coronavirus support scheme, except any payment made under the Coronavirus Job Retention Scheme in respect of an employee, except where the claimant is a partner in the trade, profession or vocation in which case paragraph (2) applies. 2 Where the claimant is a partner in a trade, profession or vocation, the claimant’s trading income is— a the taxable profits for the tax year arising from the claimant’s share of the partnership’s trading or professional income; and b any grant or any sum paid to the claimant under a coronavirus support scheme, except any payment made under the Coronavirus Job Retention Scheme in respect of an employee. 3 In this regulation— a “taxable profits” has the same meaning as it has in Part 2 of ITTOIA but disregarding the relevant benefit amount in section 23E (tax treatment of relevant benefits) and Chapter 16 of that Part (averaging profits of farmers and creative artists); and b “Coronavirus Job Retention Scheme” means the scheme of that name established under the direction given by the Chancellor of the Exchequer under section 76 of the Coronavirus Act 2020 on 15th April 2020 (as that Scheme has effect from time to time). . 4 For regulation 18 (miscellaneous income) substitute— Miscellaneous Income 18 In these Regulations “miscellaneous income” means income which does not fall within any other provision of these Regulations, and which is either— a subject to income tax under Part 5 of ITTOIA; or b a payment under, or in connection with, a coronavirus support scheme. . 5 In regulation 19 (general disregards in the calculation of income) — a in paragraph (2) omit the definition of “Scottish Ministers”; and b in Table 6 (sums disregarded in the calculation of income) after entry 33 insert— 34 A payment, whether in cash or by way of a voucher, in lieu of free school meals. 35 A payment in connection with emergency volunteering leave under Schedule 7 to the Coronavirus Act 2020. 36 A payment made under the scheme known as the NHS and Social Care Coronavirus Life Assurance Scheme 2020. . Amendment of the Tax Credits (Claims and Notifications) Regulations 2002 4 1 The Tax Credits (Claims and Notifications) Regulations 2002 are amended as follows. 2 In regulation 2 (interpretation) — a after the definition of “the Contributions and Benefits Act” insert— “Coronavirus Job Retention Scheme” means the scheme of that name established under the direction given by the Chancellor of the Exchequer on 15th April 2020 (as that Scheme has effect from time to time); ; b after the definition of “couple” insert— “critical worker” means a worker in a critical sector listed— in England in the version of the document entitled “Guidance for schools, childcare providers, colleagues, local authorities in England on maintaining educational provision” published by the Cabinet Office and the Department for Education on 14th May 2020 ; in Scotland in the document entitled “Coronavirus (COVID-19): school and early learning closures – guidance about key workers and vulnerable children” published on 31st March 2020 ; in Wales in the version of the document entitled “Coronavirus key (critical) workers” published on 18th May 2020 ; and in Northern Ireland in the document entitled “General Guidance on COVID-19 for schools ; and c in the definition of “the Board” for “of Inland Revenue” substitute “for Her Majesty’s Revenue and Customs”. 3 In regulation 21 (requirement to notify changes of circumstances which may decrease rate) after paragraph (3) insert— 4 Where the claimant is a critical worker, this paragraph does not apply for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends, but regulation 21A applies during that period. . 4 After regulation 21 insert— Coronavirus – date of notification – cases where change of circumstances which may decrease the rate at which a person is, or persons are, entitled to a tax credit or mean that entitlement to that tax credit ceases 21A 1 This regulation only applies— a for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends; and b if the claimant is a critical worker during that period. 2 Where this regulation applies, the claimant must give notification within the time prescribed by paragraph (3) if there is a change of circumstances of the description prescribed by paragraph (2) of regulation 21 (requirement to notify changes of circumstances which may decrease the rate etc.) which may decrease the rate at which that person is entitled to that tax credit or means that that person ceases to be entitled to that tax credit. 3 The time prescribed by this paragraph is the period of three months beginning on the date on which the change of circumstances occurs. . 5 In regulation 25 (date of notification – cases where a change of circumstances which may increase the maximum rate) , after paragraph (3) insert— 4 Where the claimant is a critical worker, this regulation does not apply for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends, but regulation 25A applies during that period. . 6 After regulation 25 insert— Coronavirus – date of notification – cases where change of circumstances may increase the maximum rate 25A 1 This regulation only applies— a for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends; and b if the claimant is a critical worker during that period. 2 Where— a this regulation applies; and b a notification of change of circumstances which may increase the maximum rate at which a critical worker may be entitled to a tax credit is given in the circumstances prescribed by paragraph (2) of regulation 25 (date of notification – cases where change of circumstances which may increase the maximum rate), that notification is to be treated as having been given on the date prescribed by paragraph (3). 3 The date prescribed by this paragraph is— a the date falling three months before the notification date; or b if later, the date of the change of circumstances. . 7 In regulation 26 (date of notification – disability element and severe disability element of working tax credit) after paragraph (3) insert— 4 Where the claimant is a critical worker, this regulation does not apply for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends, but regulation 26B applies during that period. . 8 In regulation 26A (date of notification - disability element where child is disabled or severely disabled) after paragraph (4) insert— 5 Where the claimant is a critical worker, this regulation does not apply for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends, but regulation 26B applies during that period. . 9 After regulation 26A insert— Coronavirus – date of notification of disability 26B 1 This regulation only applies— a for the period beginning on 23rd May 2020 and ending on the date on which the Coronavirus Job Retention Scheme ends; and b if the claimant is a critical worker during that period. 2 Where— a this regulation applies; and b a notification of a change of circumstances which may increase the maximum rate at which a critical worker may be entitled to working tax credit is given in the circumstances prescribed by paragraph (4), the notification is to be treated as having been given on the date prescribed by paragraph (5). 3 Where— a this regulation applies; and b a notification of a change of circumstances which may increase the maximum rate at which a critical worker may be entitled to child tax credit is given in the circumstances prescribed by paragraph (6), the notification is to be treated as having been given on the date prescribed by paragraph (7). 4 The circumstances prescribed by this paragraph are where— a a notification is given of a change of circumstances in respect of a claim to working tax credit, which results in the Board making an award of the disability element or the severe disability element of working tax credit (or both of them) in favour of a person or persons; and b the notification date is within three months of the date that a claim for any of the benefits referred to in regulations 9(2) to (8) or 17(2) of the Working Tax Credit Regulations is determined in favour of those persons (or one of them). 5 The date prescribed by this paragraph is the latest of the following— a the first date in respect of which the benefit claimed was payable; b the date falling three months before the claim for the benefit was made; c the date the claim for working tax credit was made (or treated as made under regulations 7 (time limits for claims) and 7A (time limit for claims – the Childcare Payments Act 2014)); d for the purposes of the disability element only, the first date that the person or persons satisfied the conditions of entitlement for the disability element. 6 The change of circumstances prescribed by this paragraph are where— a a notification is given of a change of circumstances in respect of a claim to child tax credit which results in the Board making an award of the disability element of that tax credit in favour of a person or persons, in respect of a child where that child is disabled or severely disabled; and b the notification date is within three months of the date that a claim for a disability benefit, personal independence payment or armed forces independence payment in respect of the child is determined in favour of those persons (or one of them). 7 The date prescribed by this paragraph is the latest of the following— a the first date in respect of which the disability benefit, the personal independence payment or the armed forces independence payment was payable; b the date falling three months before the claim for a disability benefit, personal independence payment or armed forces independence payment was made; c the date the claim for child tax credit was made (or treated as made under regulations 7 and 7A). 8 In this regulation “disability benefit” has the meaning given by regulation 26A(4). . James Morris Iain Stewart Two of the Lords Commissioners of Her Majesty’s Treasury 21st May 2020 Jim Harra Angela MacDonald Two of the Commissioners for Her Majesty’s Revenue and Customs 21st May 2020