HM Treasury has made regulations confirming how two new Scottish carer benefits will be treated for income tax. The Income Tax (Tax Treatment of Scottish Carer Supplement and Exemption of Carer’s Additional Person Payment) Regulations 2026 were made on 3 February, laid before the House of Commons on 5 February, and take effect from 15 March 2026 to coincide with Scottish reforms.
The instrument amends Part 10 of the Income Tax (Earnings and Pensions) Act 2003. It brings the Scottish Carer Supplement within the list of taxable UK social security benefits and confirms that the Carer’s Additional Person Payment is not chargeable to income tax by adding it to the exemptions table. In practical terms, the supplement counts towards taxable income; the additional person payment does not.
These changes align UK tax law with the Scottish Government’s overhaul of carer support. From 15 March 2026, Carer Support becomes a single benefit with three components: Carer Support Payment, Scottish Carer Supplement paid alongside it, and a £10‑per‑week Carer’s Additional Person Payment for those providing regular and substantial care to more than one person.
For carers in Scotland, the immediate implication is that any Scottish Carer Supplement received on or after 15 March 2026 falls within the 2025/26 tax year. Individuals whose total income exceeds their Personal Allowance may see a small increase in their income tax liability for that year. By contrast, the Carer’s Additional Person Payment will not affect taxable income.
Administration remains straightforward. Social Security Scotland will award Scottish Carer Supplement automatically to eligible recipients of Carer Support Payment; there is no separate claim. HMRC can collect any tax due through Self Assessment or by adjusting PAYE codes for those in work, in line with standard treatment of taxable social security income.
Employers and payroll teams are not required to operate PAYE on these payments, as they are not employment income. Finance and welfare advisers should, however, factor the taxable status of the supplement into year‑end projections for clients who are near or above the Personal Allowance, and record award notices for reconciliation.
The reforms sit alongside wider Scottish changes due on 15 March 2026, including extending the ‘bereavement run‑on’ for Carer Support from eight to twelve weeks and replacing the twice‑yearly Carer’s Allowance Supplement with the new Scottish Carer Supplement paid regularly with Carer Support Payment.
Legally, the Treasury acted under powers in section 13 of the Finance Act 2020 and section 27 of the Finance (No. 2) Act 2023. The instrument updates ITEPA 2003 provisions that list taxable UK benefits and those wholly exempt, ensuring consistency as Scotland completes its transition to the Carer Support system.
What to watch next is HMRC’s published guidance and coding practice reflecting the new entries. Advisers should check that 2025/26 calculations include Scottish Carer Supplement from 15 March and confirm that Carer’s Additional Person Payment is correctly treated as exempt in client files.