Regulation 23 Deduction of tax and contributions for self-employed earnersI1

England, Wales and Scotland

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

reg. 23(5)(a) words substituted by Housing Benefit and Council Tax Benefit 2005 reg. 3(7)
reg. 23(1) words substituted by Housing Benefit and Council Tax Benefit 2005 reg. 3(8)(a)
reg. 23(1)(a)(b) words substituted by Housing Benefit and Council Tax Benefit 2005 reg. 3(8)(b)(i)
reg. 23(1)(a)(b) words substituted by Housing Benefit and Council Tax Benefit 2005 reg. 3(8)(b)(ii)
reg. 23(2)(d) words substituted by SI 2003/325 reg. 17 (as amended) by Housing Benefit and Council Tax Benefit (State Pension Credit and Miscellaneous Amendments) 2003 reg. 2(9)(g)
reg. 23(5)(a) word omitted by SI 2003/325 reg. 17 (as amended) by Housing Benefit and Council Tax Benefit (State Pension Credit and Miscellaneous Amendments) 2003 reg. 2(9)(h)
reg. 23(1) words omitted by Housing Benefit and Council Tax Benefit 1994 reg. 18

(1)

The amount to be deducted in respect of income tax under regulation 22(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 (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 22(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) shall be the total of—

F3(a)

the amount of Class 2 contributions payable under section 11(1) or, as the case may be, 11(3) of the Contributions and Benefits Act 1992 at the rate applicable at the date of claim except where the claimant’s chargeable income is less than the amount specified in section 11(4) of that Act (small earnings exception) for the tax year in which the date of claim falls; but if the assessment period is less than a year, the amount specified for that tax year shall be reduced pro rata; and

(b)

the amount of Class 4 contributions (if any) which would be payable under section 15 of that Act (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable at the date of claim on so much of the chargeable income as exceeds the lower limit but does not exceed the upper limit of profits and gains applicable for the tax year in which the date of claim falls; but if the assessment period is less than a year, those limits shall be reduced pro rata.

(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 22;

(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. 23(1) substituted (1.4.1993 immediately after art. 20 of S.I. 1993/349 comes into force) by The Council Tax Benefit (General) Amendment Regulations 1993 (S.I. 1993/688), regs. 1(1), 7(a)
F2: Words in reg. 23(1) inserted (1.4.1993 immediately after art. 20 of S.I. 1993/349 comes into force) by The Council Tax Benefit (General) Amendment Regulations 1993 (S.I. 1993/688), regs. 1(1), 7(b)
F3: Reg. 23(2)(a)(b) substituted (4.10.1993) by The Housing Benefit and Council Tax Benefit (Miscellaneous Amendments) Regulations 1993 (S.I. 1993/2118), regs. 1(1), 22

Commencement

I1: Reg. 23 in force at 1.4.1993, see reg. 1(b)