The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations (Northern Ireland) 2006

SECTION 4 N.I. Self-employed earners

Calculation of earnings of self-employed earners N.I.

35.—(1) Where a claimant’s earnings consist of earnings from employment as a self-employed earner, the weekly amount of his earnings shall be determined by reference to his average weekly earnings from that employment—

(a) over a period of one year; or

(b) where the claimant has recently become engaged in that employment or there has been a change which is likely to affect the normal pattern of business, over such other period (“computation period”) as may, in the particular case, enable the weekly amount of his earnings to be determined more accurately.

(2) For the purposes of determining the weekly amount of earnings of a claimant to whom paragraph (1)(b) applies, his earnings over the computation period shall be divided by the number equal to the number of days in that period and multiplying the quotient by 7.

(3) The period over which the weekly amount of a claimant’s earnings is calculated in accordance with this regulation shall be his assessment period.

Commencement Information

I1 Reg. 35 in operation at 20.11.2006, see reg. 1(1)

Earnings of self-employed earners N.I.

36.—(1) Subject to paragraph (2), “earnings”, in the case of employment as a self-employed earner, means the gross receipts of the employment and shall include any allowance payable pursuant to provision or arrangements made by the Department for Employment and Learning under sections 2 and 3 of the Disabled Persons (Employment) Act (Northern Ireland) 1945(1) or section 1 of the 1950 Act(2) or any equivalent allowance payable under Republic of Ireland legislation to the claimant for the purpose of assisting him in carrying on his business unless at the date of claim the allowance has been terminated.

(2) “Earnings” in the case of employment as a self-employed earner does not include—

(a) where a claimant occupies a dwelling as his home and he provides in that dwelling board and lodging accommodation for which payment is made, those payments;

(b) any payment made by an authority, as defined in Article 2 of the Children Order, to a claimant who is caring for a child by virtue of arrangements made under Article 27(2)(a) of that Order (provision of accommodation and maintenance by an authority for children whom it is looking after);

(c) any payment made by a voluntary organisation under Article 75(1)(a) of the Children Order (provision of accommodation by voluntary organisations);

(d) any payment made to the claimant or his partner for a person (“the person concerned”) who is not normally a member of the claimant’s household but is temporarily in his care, by—

(i) a Health and Social Services Board or HSS trust;

(ii) a voluntary organisation, or

(iii) the person concerned pursuant to Article 36(7) of the Health and Personal Social Services Order(3); or

(e) any sports award.

Commencement Information

I2 Reg. 36 in operation at 20.11.2006, see reg. 1(1)

Calculation of net profit of self-employed earners N.I.

37.—(1) For the purposes of regulation 28 the earnings of a claimant to be taken into account shall be—

(a) in the case of a self-employed earner who is engaged in employment on his own account, the net profit derived from that employment;

(b) in the case of a self-employed earner whose employment is carried on in partnership, his share of the net profit derived from that employment, less—

(i) an amount in respect of income tax and of social security contributions payable under the Act calculated in accordance with regulation 38, and

(ii) one half of the amount calculated in accordance with paragraph (10) in respect of any qualifying premium.

(2) For the purposes of paragraph (1)(a) the net profit of the employment shall, except where paragraph (8) applies, be calculated by taking into account the earnings of the employment over the assessment period less—

(a) subject to paragraphs (4) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment;

(b) an amount in respect of—

(i) income tax, and

(ii) social security contributions payable under the Act,

calculated in accordance with regulation 38; and

(c) one half of the amount calculated in accordance with paragraph (10) in respect of any qualifying premium.

(3) For the purposes of paragraph (1)(b) the net profit of the employment shall be calculated by taking into account the earnings of the employment over the assessment period less, subject to paragraphs (4) to (7), any expenses wholly and exclusively incurred in that period for the purposes of the employment.

(4) Subject to paragraph (5), no deduction shall be made under paragraph (2)(a) or (3), in respect of—

(a) any capital expenditure;

(b) the depreciation of any capital asset;

(c) any sum employed or intended to be employed in the setting up or expansion of the employment;

(d) any loss incurred before the beginning of the assessment period;

(e) the repayment of capital on any loan taken out for the purposes of the employment; and

(f) any expenses incurred in providing business entertainment.

(5) A deduction shall be made under paragraph (2)(a) or (3) in respect of the repayment of capital on any loan used for—

(a) the replacement in the course of business of equipment or machinery;

(b) the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair; and

(c) the purchase of land under the Northern Ireland Land Act 1925(4).

(6) The relevant authority shall refuse to make a deduction in respect of any expenses under paragraph (2)(a) or (3) where it is not satisfied given the nature and the amount of the expense that it has been reasonably incurred.

(7) For the avoidance of doubt—

(a) a deduction shall not be made under paragraph (2)(a) or (3) in respect of any sum unless it has been expended for the purposes of the business;

(b) a deduction shall be made thereunder in respect of—

(i) the excess of any value added tax paid over value added tax received in the assessment period;

(ii) any income expended in the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair;

(iii) any payment of interest on a loan taken out for the purposes of the employment.

(8) Where a claimant is engaged in employment as a child minder the net profit of the employment shall be one third of the earnings of that employment, less—

(a) an amount in respect of—

(i) income tax, and

(ii) social security contributions payable under the Act,

calculated in accordance with regulation 38; and

(b) one half of the amount calculated in accordance with paragraph (10) in respect of any qualifying premium.

(9) For the avoidance of doubt where a claimant is engaged in employment as a self-employed earner and he is also engaged in one or more other employments as a self-employed or employed earner any loss incurred in any one of his employments shall not be offset against his earnings in any other of his employments.

(10) The amount in respect of any qualifying premium shall be calculated by multiplying the daily amount of the qualifying premium by the number equal to the number of days in the assessment period; and for the purposes of this regulation the daily amount of the qualifying premium shall be determined—

(a) where the qualifying premium is payable monthly, by multiplying the amount of the qualifying premium by 12 and dividing the product by 365;

(b) in any other case, by dividing the amount of the qualifying premium by the number equal to the number of days in the period to which the qualifying premium relates.

(11) Where the claimant is a self-employed earner in the Republic of Ireland the amounts to be deducted for income tax and social security contributions under this regulation shall be such amounts as, in the opinion of the appropriate authority, would have been deducted had the claimant been employed in Northern Ireland.

(12) In this regulation, “qualifying premium” means any premium which is payable periodically in respect of F1 ... a personal pension scheme and is so payable on or after the date of claim.

Textual Amendments

F1 Words in reg. 37(12) omitted (16.7.2007) by virtue of The Social Security (Miscellaneous Amendments No. 2) Regulations (Northern Ireland) 2007 (S.R. 2007/306), regs. 1(1), 6(3)

Commencement Information

I3 Reg. 37 in operation at 20.11.2006, see reg. 1(1)

Deduction of tax and contributions of self-employed earners N.I.

38.—(1) The amount to be deducted in respect of income tax under regulation 37(1)(b)(i), (2)(b)(i) or (8)(a)(i) shall be calculated on the basis of the amount of chargeable income and as if that income were assessable to income tax at the [F2 starting rate] or, as the case may be, the lower rate and the basic rate of tax applicable to the assessment period less only the personal relief to which the claimant is entitled under section 257(1) of the Taxes Act as is appropriate to his circumstances; but, if the assessment period is less than a year, the earnings to which the [F2 starting 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 37(1)(b)(i), (2)(b)(ii) or (8)(a)(ii) shall be the total of—

(a) the amount of Class 2 contributions payable under section 11(1) or, as the case may be, 11(3) of the Act at the rate applicable to the assessment period except where the claimant’s chargeable income is less than the amount specified in section 11(4) of the Act (small earnings exception) for the tax year applicable to the assessment period; 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 the Act (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable to the assessment period 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 applicable to the assessment period; 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 (2)(a) or, as the case may be, (3) of regulation 37;

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

Textual Amendments

F2 Words in reg. 38(1) substituted (1.10.2007) by The Social Security (Miscellaneous Amendments No. 5) Regulations (Northern Ireland) 2007 (S.R. 2007/396), regs. 1(1), 10(5)

Commencement Information

I4 Reg. 38 in operation at 20.11.2006, see reg. 1(1)

(1)

1945 c. 6 (N.I.); sections 2 and 3 were amended by section 1 of the Disabled Persons (Employment) Act (Northern Ireland) 1960 (c. 4 (N.I.)) and Schedule 18 to the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3))

(2)

Section 1 was amended by Article 3 of the Employment and Training (Amendment) (Northern Ireland) Order 1988 (S.I. 1988/1087 (N.I. 10)) and Article 5 of the Industrial Training (Northern Ireland) Order 1990 (S.I. 1990/1200 (N.I. 8))

(3)

Article 36 was substituted by Article 25 of the Health and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194 (N.I. 1))

(4)

1925 c. 34