Regulation 22 Deduction of tax and contributions for self-employed earnersI1

England, Wales and Scotland

(1)

The amount to be deducted in respect of income tax under regulation 21(1)(b)(i), (3)(b)(i) or (9)(a)(i) (calculation of net profit of self-employed earners) shall be calculated on the basis of the amount of chargeable income and as if that income were assessable to income tax at F1the lower rate or, as the case may be, the lower rate and the basic rate of tax in the year of assessment in which the claim was made less only the personal relief to which the claimant is entitled under sections 257(1), (6) and (7) and 259(1)(a) and (2) of the Income and Corporation Taxes Act 1988^f1 (personal relief) as is appropriate to his circumstances; but, if the assessment period is less than a year, F2the earnings to which the lower rate and, if appropriate, the basic rate of tax is to be applied and the amount of the personal relief deductible under this paragraph shall be calculated on a pro-rata basis.

(2)

The amount to be deducted in respect of social security contributions under regulation 21(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) shall be the total of–

(a)

the amount of Class 2 contributions payable under section 7(1) or, as the case may be, (4) of the Social Security Act^f2 except where the claimant’s chargeable income is less than the amount for the time being specified in section 7(5) of the Act^f3 (small earnings exception); and

(b)

the amount of Class 4 contributions (if any) which would be payable under section 9 of that Act^f4 (Class 4 contributions recoverable under Tax Acts) in respect of profits or gains equal to the amount of that income.

(3)

In this regulation “chargeable income” means–

(a)

except where sub-paragraph (b) applies, the earnings derived from the employment less any expenses deducted under paragraph (3)(a) or, as the case may be, (4) of regulation 21;

(b)

in the case of employment as a child minder, one third of the earnings of that employment.

Annotations

Textual amendments

F1: Words in reg. 22(1) substituted (5.10.1992) by The Housing Benefit and Community Charge Benefits (Miscellaneous Amendments) (No.2) Regulations 1992 (S.I. 1992/2148), regs. 1(1), 17(a)
F2: Words in reg. 22(1) inserted (5.10.1992) by The Housing Benefit and Community Charge Benefits (Miscellaneous Amendments) (No.2) Regulations 1992 (S.I. 1992/2148), regs. 1(1), 17(b)

Commencement

I1: Reg. 22 in force at 1.4.1990, see reg. 1

Footnotes

f1: 1988 c. 1.
f2: Section 7(1) was amended by section 2(4) of the Education (School-Leaving Dates) Act 1976 (c. 5), section 17(1) of the Health and Social Security Act 1984 (c. 48), and article 3 of S.I. 1989/26.
f3: Section 7(5) was amended by article 3 of S.I. 1989/26.
f4: Section 9 was amended by sections 4 and 65 of and Schedule 5 to, the Social Security Pensions Act 1975 (c. 60), the Social Security Contributions Act 1982 (c. 2), section 1 and by article 5 of S.I. 1989/26.