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Legislation will be introduced in the Finance Bill
(with effect from 6 April 2008) to exempt from income tax payments made
under these schemes which aim to encourage people on benefit to return to
work. Secondary legislation will also be laid to ensure these payments are
also disregarded for National Insurance Contributions (NICs).
Our view
Payments made under these national schemes would currently constitute
earnings for income tax and NIC purposes. The introduction of the
exemptions will make them more effective incentives. |
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