The Tax Credits (Coronavirus, Miscellaneous Amendments) Regulations 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(1) 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(2) on 15th April 2020 (as that Scheme has effect from time to time);

“coronavirus-impacted worker” has the meaning given by regulation 7E(3)(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)(4) 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(5),”.

(4) In regulation 7D (ceasing to undertake work or working for less than 16, 24 or 30 hours per week)(6) 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(7); 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(8) 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)(9)—

(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.”.

(1)

S.I. 2002/2005 (“the principal Regulations”), relevant amending instruments are S.I. 2003/701, 2007/968, 2009/1829, 2012/848 and 2015/605.

(2)

2020 c. 7. A copy of the direction can be found at: https://www.gov.uk/government/publications/treasury-direction-made-under-sections-71-and-76-of-the-coronavirus-act-2020. A hard copy is available for inspection, free of charge, at the offices of HMRC at 10 South Colonnade, Canary Wharf, London E14 4PH.

(3)

Regulation 7E is inserted by paragraph (5) of this regulation.

(4)

Paragraph (1A) of regulation 4 was inserted by regulation 2 of S.I. 2012/848.

(5)

2020 c. 7.

(6)

Regulation 7D was inserted by regulation 2 of S.I. 2007/968, subsequently substituted by regulation 8 of S.I. 2009/1829 and amended by regulation 2 of S.I. 2012/848.

(7)

Paragraph 6.1 of the Schedule to the Direction defines “furloughed employee”.

(8)

“Employed” and “Self-employed” are defined in regulation 2 of the principal Regulations. The definition of “employed” was substituted by regulation 3 of S.I. 2003/701 and subsequently amended by regulation 13 of S.I. 2003/2815. The definition of “self-employed” was inserted by regulation 3 of S.I. 2015/605.

(9)

Paragraph (3) of regulation 10 was revoked by regulation 2 of S.I. 2012/848.