Date lodged: 7 February 2018
To ask the Scottish Government what discussions it has had with the UK Government regarding amending the Income Tax (Earnings and Pensions) Act 2003 to include the carers allowance supplement in the list of social security benefits that are wholly exempt from tax.
Answered by: Jeane Freeman 27 February 2018
Carer’s Allowance is a taxable benefit and therefore Carer’s Allowance Supplement will be taxable, as the legal definition of income for tax purposes remains reserved to the UK Government. The Scottish Government does not have the power to change this as set out in the Fiscal Framework, which states at section 89: Any new benefits or discretionary payments introduced by the Scottish Government will not be deemed to be income for tax purposes, unless topping up a benefit which is deemed taxable such as Carer’s Allowance. Any changes to reserved taxation legislation require to be made by the UK Government.