The Employment and Support Allowance Regulations 2008

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

99.—(1) Subject to paragraph (2), the amount to be deducted in respect of income tax under regulation 98(1)(b)(i), (3)(b)(i) or (9)(a)(i) (calculation of net profit of self-employed earners) is to be calculated on the basis of the amount of chargeable income and as if that income were assessable to income tax at the F1 ... [F2 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 F3 as are appropriate to the claimant’s circumstances].

(2) If the period determined under regulation 92 is less than a year the earnings to which the [F4 basic rate][F5 , or the Scottish basic rate,] of tax is to be applied and the amount of the personal reliefs deductible under [F6 paragraph (1) are] to be calculated on a pro rata basis.

(3) The amount to be deducted in respect of National Insurance contributions under regulation 98(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) is to be the total of—

F7 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the amount of Class 4 contributions (if any) which would be payable under section 15 of that Act F8 (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable at the date of claim 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 the date of claim falls; but if the assessment period is less than a year, those limits are to be reduced pro rata.

(4) 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 (3)(a) or, as the case may be, (4) of regulation 98;

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

Textual Amendments

F1 Words in reg. 99(1) omitted (27.10.2008) by virtue of The Employment and Support Allowance (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/2428), regs. 1(2), 8(3)(a)

F2 Words in reg. 99(1) substituted (6.4.2016) by The Social Security (Scottish Rate of Income Tax etc.) (Amendment) Regulations 2016 (S.I. 2016/233), regs. 1, 6(3)(a)

F3 2007 c. 3.

F4 Words in reg. 99(2) substituted (27.10.2008) by The Employment and Support Allowance (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/2428), regs. 1(2), 8(3)(b)

F5 Words in reg. 99(2) inserted (6.4.2016) by The Social Security (Scottish Rate of Income Tax etc.) (Amendment) Regulations 2016 (S.I. 2016/233), regs. 1, 6(3)(b)(i)

F6 Words in reg. 99(2) substituted (6.4.2016) by The Social Security (Scottish Rate of Income Tax etc.) (Amendment) Regulations 2016 (S.I. 2016/233), regs. 1, 6(3)(b)(ii)

F7 Reg. 99(3)(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(15) (with reg. 1(4))

F8 Section 15 was amended by the Income Tax (Trading and Other Income) Act 2005 (c. 5), sections 882(1) and 884 and paragraphs 419 and 420(1), (2)(a), (c) and (d), (3) and (4) of Schedule 1 and Schedule 3, the National Insurance Contributions Act 2002 (c. 19), section 3(1), the Limited Liability Partnerships Act 2000 (c. 12), section 13 and S.I. 2007/1052, article 4(a) and (b).