The Social Security Benefit (Computation of Earnings) Regulations 1996

Deduction of tax and contributions for self-employed earners E+W+S

14.—(1) The amount to be deducted in respect of income tax under regulation 13(1)(b)(i), (4)(b)(i) or (10)(a)(i) (calculation of net profit of self-employed earners) shall be calculated on the basis of the amount of chargeable income and as if that income were assessable to income tax at the [F1 basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are] appropriate to his circumstances; but, if the period determined under regulation 11 (calculation of earnings of self-employed earners) is less than a year, the earnings to which the [F2 basic rate, or the Scottish basic rate,] of tax is to be applied and the amount of the personal [F3 reliefs] 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 13(1)(b)(i), (4)(b)(ii) or (10)(a)(ii) shall be the total of—

F4 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the amount of Class 4 contributions (if any) which would be payable under section 15 of that Act (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable at the date of the determination of the claim or of any subsequent review 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 in which that date falls; 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 (4)(a) or, as the case may be, (5) of regulation 13;

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

Textual Amendments

F1 Words in reg. 14(1) substituted (6.4.2016) by The Social Security Benefit (Computation of Earnings) (Amendment) Regulations 2016 (S.I. 2016/267), regs. 1, 2(4)(a)

F2 Words in reg. 14(1) substituted (6.4.2016) by The Social Security Benefit (Computation of Earnings) (Amendment) Regulations 2016 (S.I. 2016/267), regs. 1, 2(4)(b)

F3 Word in reg. 14(1) substituted (6.4.2016) by The Social Security Benefit (Computation of Earnings) (Amendment) Regulations 2016 (S.I. 2016/267), regs. 1, 2(4)(c)

F4 Reg. 14(2)(a) omitted (6.4.2024) by virtue of The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations 2024 (S.I. 2024/377), regs. 1(1), 8(7) (with reg. 1(4))

Modifications etc. (not altering text)

C1 Regs. 11-14 modified by S.I. 2002/1792, reg. 17B (as inserted (6.10.2003) by State Pension Credit (Consequential, Transitional and Miscellaneous Provisions) Regulations 2002 (S.I. 2002/3019), regs. 1(2)(b), 23(i)) (as amended (5.8.2016) by (S.I. 2016/732), arts. 1(1), 4(2))