Social Security Contributions and Benefits Act 1992

3 (1) For the purposes of computing the amount of profits or gains in respect of which Class 4 contributions are payable, relief shall be available under, and in the manner provided by, the following provisions of the Act of 1988—

(a) sections 380 and 381 (set-off of trade losses against general income), but only where loss arises from activities the profits or gains of which would be brought into computation for the purposes of Class 4 contributions;

(b) section 383 (extension of right of set-off to capital allowances);

(c) section 385 (carry-forward of loss against subsequent profits); and

(d) sections 388 and 389 (carry-back of terminal losses).

(2) The following relief provisions of the Act of 1988 shall not apply, that is to say—

(a) Chapter I of Part VII (personal reliefs);

(b) section 353 (relief for payment of interest);

(c) section 387 (carry-forward as losses of amounts to be taxed under section 350);

(d) section 390 (treatment of interest as a loss for purposes of carry-forward or carry-back);

(e) section 617(5) (relief for Class 4 contributions); and

(f) sections 619 and 620 (premiums or other consideration under annuity contracts and trust schemes).

(3) Where in the year 1989-90 or any previous year of assessment for which a person claims and is allowed relief by virtue of sub-paragraph (1) above—

(a) there falls to be made in computing his total income for income tax purposes, or that of his spouse, a deduction in respect of any loss, and

(b) the deduction or part of it falls to be so made from income other than profits or gains of a trade, profession or vocation,

the amount of the deduction made from the other income shall be treated as reducing the person’s profits or gains (that is to say the profits or gains of any relevant trade, profession or vocation as computed for the purpose of the charge to Class 4 contributions) for subsequent years (being deducted as far as may be from those of the immediately following year, whether or not he claims or is entitled to claim relief under this paragraph for that year, and, so far as it cannot be so deducted, then from those of the next year, and so on).

(4) Where in the year 1990-1991 or any subsequent year of assessment for which a person claims and is allowed relief by virtue of sub-paragraph (1) above there falls to be made in computing his total income for income tax purposes a deduction in respect of any loss in any relevant trade, profession or vocation—

(a) the amount of the deduction shall, as far as may be, be treated for the purpose of the charge to Class 4 contributions as reducing the person’s profits or gains for that year of any relevant trade, profession or vocation, and

(b) any excess shall be treated for that purpose as reducing such profits or gains for subsequent years (being deducted as far as may be from those of the immediately following year, whether or not the person claims or is entitled to claim relief under this paragraph for that year, and, so far as it cannot be so deducted, then from those of the next year, and so on).

(5) Relief shall be allowed, in respect of—

(a) payments under section 348 or 349(1) of the Act of 1988 (annuities and other annual payments, etc.); or

(b) payments under section 353 of that Act (relief for payment of interest), being payments for which relief from income tax is or can be given,

so far as incurred wholly or exclusively for the purposes of any relevant trade, profession or vocation, by way of deduction from or set-off against profits or gains chargeable to Class 4 contributions for the year in which the payments are made; and, in the case of any insufficiency of the profits or gains of that year, the payments shall be carried forward and deducted from or set off against the profits or gains of any subsequent year (being deducted or set off as far as may be from or against the profits or gains of the immediately following year, whether or not relief can be claimed under this paragraph for that year, and so far as it cannot be so deducted, from or against those of the next year, and so on).