Thousands of care workers in Wales to be ‘taxed’ on £500 coronavirus bonus

Thousands of care workers in Wales will pay tax and National Insurance contributions on a £500 bonus given to them for their work during the coronavirus pandemic.

First Minister Mark Drakeford announced the payment to around 64,000 care home and domiciliary care workers last month.

The bonus is liable for tax and National Insurance because it is a work-related payment but it could be waived by the UK Government.

Mr Drakeford (pictured) had called for the waiver on the basis the country was experiencing “exceptional circumstances” and that some of the workforce were among the lowest paid in Wales.

ITV News reported the UK Government had not agreed to the waiver and instead said the Welsh Government had the funding to “gross up” the payment.

“We value the contribution of social care workers, particularly during the current crisis,” a HM Treasury spokesman said.

“We also understand that the collective response to Covid-19 needs to be UK-wide, which is why alongside our UK-wide support schemes we’ve provided over £2.2 billion of funding for the Welsh Government to support people, businesses and public services.

“We are working with the Welsh Government to determine the exact scope of the proposed bonus.

“Payments made in connection with employment are however chargeable to income tax and National Insurance Contributions unless explicitly exempt.

“The Welsh Government has the powers and funding to gross up the payment, if its intention is for social care workers to benefit by at least £500.”

A Welsh Government spokeswoman said: “We are very disappointed that the UK Government wants to tax the one-off thank you payment we are going to make to carers.

“We had hoped they would step up to the plate as we have done by prioritising these payments amongst all the very significant extra demands Covid has made on us.

“We will continue to pursue this with them.”

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