Income and Corporation Taxes Act 1988

617 Social security benefits and contributions

(1) Payments of benefit under Chapters I to III of Part II of the [1975 c. 14.] Social Security Act 1975, Part II of the [1975 c. 60.] Social Security Pensions Act 1975, Chapters I to III of Part II of the [1975 c. 15.] Social Security (Northern Ireland) Act 1975 or Part III of the [S.I. 1975/1503 (N.I. 15).] Social Security Pensions (Northern Ireland) Order 1975, except—

(a) sickness benefit, invalidity benefit, attendance allowance, mobility allowance, severe disablement allowance, maternity allowance, widow’s payments, child’s special allowance and guardian’s allowance; and

(b) so much of any benefit as is attributable to an increase in respect of a child,

shall be charged to income tax under Schedule E.

(2) The following payments shall not be treated as income for any purpose of the Income Tax Acts—

(a) payments of income support, family credit or housing benefit under the [1986 c. 50.] Social Security Act 1986 or the [S.I. 1986/1888 (N.I. 18)] Social Security (Northern Ireland) Order 1986 other than payments of income support which are taxable by virtue of section 151;

(b) payments of child benefit; and

(c) payments excepted by subsection (1) above from the charge to tax imposed by that subsection.

(3) Subject to subsection (4) and (5) below, no relief or deduction shall be given or allowed in respect of any contribution paid by any person under—

(a) Part I of the [1975 c. 14.] Social Security Act 1975, or

(b) Part I of the [1975 c. 15.] Social Security (Northern Ireland) Act 1975.

(4) Subsection (3) above shall not apply to any secondary Class I contributions within the meaning of the Social Security Act 1975 or the Social Security (Northern Ireland) Act 1975 which is allowable as a deduction in computing profits or gains, in computing expenses of management under section 75 or under that section as applied by section 76 or in computing expenses of management or supervision under section 121.

(5) An individual making a claim in that behalf shall be entitled, in computing his total income for any year of assessment, to deduct one-half of any amount (as finally settled) which is determined under subsection (2) of section 9 of the Social Security Act 1975 or of the Social Security (Northern Ireland) Act 1975 and which he is liable to pay in respect of that year by way of Class 4 contributions under either of those sections.

(6) Until such day as may be appointed by the Secretary of State by order made by statutory instrument, subsection (1)(a) above shall have effect with the omission of the words “widow’s payments”.