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Income Tax (Trading and Other Income) Act 2005

Section 868: Social security contributions: non-trades etc.

3272.This section prevents a deduction for most social security contributions in calculating profits or income. It is based on section 617 of ICTA.

3273.The rule is that there can be no deduction for a taxpayer’s own social security contributions. The section achieves this by prohibiting a deduction for any contributions and making an exception for contributions that an employer makes for employees.

3274.The rule in section 617 of ICTA applies generally for tax purposes. This Act splits the rule:

  • This section sets out the income tax rule for non-trading income charged to tax by this Act (including rents from “concerns” charged to tax by Chapter 8 of Part 3 of the Act);

  • Section 53 sets out the income tax trading income rule (applied also to property income by section 272);

  • A new section 360A of ITEPA is introduced by this Act (see paragraph 594 of Schedule 1 to this Act) to set out the rule for employment income; and

  • Section 617 of ICTA as consequentially amended (see paragraph 262 of Schedule 1 to this Act) continues to apply for corporation tax.

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