The Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013

Calculation of deduction of tax and contributions of self-employed earners E+W

25.—(1) The amount to be deducted in respect of income tax under paragraph 24(1)(b)(i), (3)(b)(i) or (9) (a)(i) (calculation of net profit of self-employed earners) must be calculated—

(a) on the basis of the amount of chargeable income, and

(b) as if that income were assessable to income tax at the basic rate of tax applicable to the assessment period less only the [F1 personal reliefs to which the applicant is entitled under Chapters 2, 3 and 3A of Part 3] of the Income Tax Act 2007(1) F2 ... as is appropriate to the applicant’s circumstances.

(2) But, if the assessment period is less than a year, the earnings to which the basic rate of tax is to be applied and the amount of the personal reliefs deductible under this paragraph must be calculated on a pro rata basis.

(3) The amount to be deducted in respect of social security contributions under paragraph 24(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) is 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 SSCBA at the rate applicable to the assessment period except where the applicant’s chargeable income is [F3 equal to or] less than the amount specified in [F4 section 11(4)(a)] of that Act ([F5 lower profits threshold]) 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 must be reduced pro rata; and

(b) the amount of Class 4 contributions (if any) which would be payable under section 15 of the SSCBA (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 must be reduced pro rata.

(4) In this paragraph “chargeable income” (“incwm trethadwy”) means—

(a) except where paragraph (b) applies, the earnings derived from the employment less any expenses deducted under [F6 sub-paragraph (3)(a) or, as the case may be, (4) of paragraph 24];

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

Textual Amendments

F1 Words in Sch. 6 para. 25(1)(b) substituted (with application in accordance with reg. 1(3) of the amending S.I.) by The Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2017 (S.I. 2017/46), regs. 1(2), 5(g)(i)

F2 Words in Sch. 6 para. 25(1)(b) omitted (with application in accordance with reg. 1(3) of the amending S.I.) by virtue of The Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2017 (S.I. 2017/46), regs. 1(2), 5(g)(ii)

F3 Words in Sch. 6 para. 25(3)(a) inserted (14.12.2022 with effect from 6.4.2022) by The Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022 (S.I. 2022/1329), regs. 1, 5(2)(a)

F4 Words in Sch. 6 para. 25(3)(a) substituted (14.12.2022 with effect from 6.4.2022) by The Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022 (S.I. 2022/1329), regs. 1, 5(3)(a)

F5 Words in Sch. 6 para. 25(3)(a) substituted (14.12.2022 with effect from 6.4.2022) by The Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022 (S.I. 2022/1329), regs. 1, 5(1)(r)(ii)

F6 Words in Sch. 6 para. 25(4)(a) substituted (15.1.2014) by The Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2014 (S.I. 2014/66), regs. 1, 9(b)

Commencement Information

I1 Sch. 6 para. 25 in force at 28.11.2013, see reg. 1(2)

(1)

2007 c.3; the heading and subsection (1) of section 35 were amended by section 4 of the Finance Act 2012 (c.14) (“2012 Act”); subsections (2) and (4) were inserted by section 4 of the Finance Act 2009 (c.10). In section 36, the heading and subsection (2) were amended by, subsection (1) substituted by, and subsection (2A) inserted by section 4 of the 2012 Act; subsection (2) has also been amended by article 3 of S.I. 2012/3047, and section 4 of the Finance Act 2009. In section 37, the heading and subsection (2) were amended by, subsection (1) substituted by, and subsection (2A) inserted by section 4 of the 2012 Act; subsection (2) has also been amended by article 3 of S.I. 2012/3047, and section 4 of the Finance Act 2009.