PART 6CALCULATION OF CAPITAL AND INCOME
C1C2 CHAPTER 2EARNED INCOME
Pt. 6 Ch. 2 applied (with modifications) by S.I. 2013/383, reg. 13(7) as substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Universal Credit and Miscellaneous Amendments Regulations 2015 (S.I. 2015/1754), regs. 1(1), 7
Employed earnings55
1
This regulation applies for the purposes of calculating earned income from employment under a contract of service or in an office, including elective office (“employed earnings”).
2
Employed earnings comprise any amounts that are general earnings, as defined in section 7(3) of ITEPA, but excluding—
a
amounts that are treated as earnings under Chapters 2 to 11 of Part 3 of ITEPA (the benefits code); and
b
amounts that are exempt from income tax under Part 4 of ITEPA.
3
In the calculation of employed earnings the following are to be disregarded—
a
expenses that are allowed to be deducted under Chapter 2 of Part 5 of ITEPA; and
b
expenses arising from participation as a service user (see regulation 53(2)).
4
The following benefits are to be treated as employed earnings—
a
statutory sick pay;
b
statutory maternity pay;
c
F3... statutory paternity pay;
F4d
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
e
statutory adoption pay; F5...
g
statutory parental bereavement pay.
F14A
A repayment of income tax or national insurance contributions received by a person from HMRC in respect of a tax year in which the person was in paid work is to be treated as employed earnings unless it is taken into account as self-employed earnings under regulation 57(4).
5
In calculating the amount of a person's employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—
a
any relievable pension contributions made by the person in that period;
b
any amounts paid by the person in that period in respect of the employment by way of income tax or primary Class 1 contributions under section 6(1) of the Contributions and Benefits Act; and
c
any sums withheld as donations to an approved scheme under Part 12 of ITEPA (payroll giving) by a person required to make deductions or repayments of income tax under the PAYE Regulations.
Pt. 6 Ch. 2 excluded in part (27.7.2013) by S.I. 2013/1508, regs. 1(2), 7(3)(b)