ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Charities
    5. Coronavirus
    6. Corporate and financial reporting
    7. Business and governance
    8. Ethics
    9. Insolvency
    10. ICAS Research
    11. Pensions
    12. Practice
    13. Public sector
    14. Sustainability
    15. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Homes for Ukraine scheme: tax treatment

  • LinkedIn (opens new window)
  • Twitter (opens new window)
Susan Cattell By Susan Cattell, Head of Tax Technical Policy

15 April 2022

Main points

  • Sponsorship payments under the Homes for Ukraine scheme will be tax-free.
  • Scheme payments will also be disregarded when calculating income for the purposes of tax credits.
  • As the payments will be non-taxable, any related expenses will not be tax deductible for landlords.

The Government has announced that sponsorship payments under the Homes for Ukraine scheme will not be taxable and that the conditions for some tax reliefs will be adjusted to take account of the scheme.

Homes for Ukraine scheme

The scheme allows individuals, charities, community groups and businesses in the UK to bring Ukrainians to the UK and provide free accommodation for them.

Sponsorship payments

The government is offering an optional ‘thank you’ payment of £350 per month for people accommodating Ukrainian refugees under the Homes for Ukraine scheme. Accommodation must be provided rent-free, so the payment is intended to recognise that there will be costs associated with providing it.

The Financial Secretary to the Treasury announced on 31 March that the government will legislate, in Finance Bill 2022-23, to ensure that these payments will not be taxable. The legislation will be retrospective and will take effect from the date the first payments are made to sponsors. Payments will be exempt from income tax, corporation tax and will not be subject to National Insurance contributions. Legislation already introduced also provides that they will be disregarded when calculating income for the purposes of tax credits.

Landlords receiving payments should note that as the payments will be treated as non-taxable income, any related expenses will not be allowable as tax deductions.

Companies

Legislation will also be included in Finance Bill 2022-23 to deal with companies that currently qualify for the existing reliefs from the Annual Tax on Enveloped Dwellings (ATED) and the 15% rate of Stamp Duty Land Tax (SDLT) for dwellings used in a property development or property trading business, or let on a commercial basis. These companies will continue to qualify for the reliefs while the dwellings are being used under the Homes for Ukraine scheme.

Where a company purchases a property for a purpose that would otherwise be relievable from the 15% rate of SDLT, relief will continue to be available if the property is to be temporarily used under the Homes for Ukraine scheme.

Where a dwelling does not currently qualify for relief from ATED, before the property is included in the Homes for Ukraine scheme, ATED relief will be available from the point of occupation where the entire dwelling is used under the Homes for Ukraine scheme.

The legislation will take effect from 1 April 2022 for ATED and from the date of the ministerial statement (31 March) for the 15% rate of SDLT.  From those dates (and to the date the legislation takes overriding effect) HMRC will not collect any ATED or SDLT that may have been due following a change in the use of the dwelling to be part of the Homes for Ukraine scheme.

HMRC has updated its ATED guidance and its SDLT guidance (SDLTM09652 and SDLTM09656) to provide more information.

Furnished Holiday Lets

The March ministerial statement did not address the potential impact on the availability of the special tax regime for Furnished Holiday Lets (FHLs), of making a property available under the Homes for Ukraine scheme. However, an earlier parliamentary question asked whether the Chancellor would review the requirement for FHLs to be let at a commercial rate for 105 days per annum, to allow the property to be offered as free accommodation to Ukrainian refugees. The question did not raise any of the other FHL conditions.

A response was provided by the Financial Secretary to the Treasury on 10 March, which suggests that there are no plans to make any adjustment to the FHL rules:

“Furnished Holiday Lets (FHLs) receive special tax treatment including the ability to claim trading Capital Gains Tax reliefs and capital allowances for items such as furniture. In addition, FHLs are not subject to any finance cost relief restriction and profits count as earnings for pension purposes.

Landlords can provide their residential properties to refugees for free. When a property does not qualify as a FHL, or stops being a qualifying FHL, the landlord becomes subject to the normal tax rules for residential property rental income.

Whilst there are no plans to change this to reflect the situation in Ukraine, the UK Government is clear that we must ensure the humanitarian needs of displaced people are met, both within and beyond Ukraine’s borders, and we urge the relevant authorities to consider and plan for such possible outcomes. The UK is now the largest bilateral humanitarian donor to Ukraine and has pledged around £400 million to help Ukraine.”

Let us know your views

ICAS responds to many tax calls for evidence and consultations, as well as producing tax policy papers and reports. We also regularly attend meetings with HMRC at which operational and technical issues are discussed, and we raise problems being encountered by Members. We welcome input from Members to inform our work: email tax@icas.com to share your insights and feedback.

Should the UK Government introduce an online sales tax?

By Susan Cattell, Head of Tax Technical Policy

4 April 2022

Tax highlights from the Spring Statement

By ICAS Tax Team

28 March 2022

2022-01-xero 2022-01-xero
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: