PART 6CALCULATION OF CAPITAL AND INCOME

C1C2 CHAPTER 2EARNED INCOME

Annotations:
Modifications etc. (not altering text)
C1

Pt. 6 Ch. 2 excluded in part (27.7.2013) by S.I. 2013/1508, regs. 1(2), 7(3)(b)

C2

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...

F2f

statutory shared parental pay;F6and

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.