The Disability Working Allowance (General) Regulations (Northern Ireland) 1992

Deduction of tax and contributions for self-employed earners

26.—(1) The amount to be deducted in respect of income tax under regulation 25(1)(b)(i), (3)(b)(i), (4)(b)(i) or (11)(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 basic rate of tax in the year of assessment in which the claim was made, less only the personal relief to which the claimant is entitled under sections 257(1), (6) and (7) and 259 of the Income and Corporation Taxes Act 1988 (personal relief) as is appropriate to his circumstances; but, if the assessment period is less than a year, the amount of the personal relief 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 25(1)(b)(i), (3)(b)(ii), (4)(b)(ii) or (11)(a)(ii) shall be the total of—

(a) the amount of Class 2 contributions payable under section 7(1) or, as the case may be, (4) of the principal Act(1) (Class 2 contributions) at the rate applicable at the date of claim except where a claimant’s chargeable income is less than the amount specified in section 7(5) of that Act(2) for the tax year in which the date of claim falls; but, if the assessment period is less than a year, the amount specified for that tax year shall be calculated on a pro rata basis; and

(b) the amount of Class 4 contributions (if any) which would be payable under section 9(2) of that Act(3) (Class 4 contributions recoverable under 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 shall be calculated on a pro rata basis.

(3) In this regulation “chargeable income” means—

(a) except where sub-paragraph (b) or (c) applies, the earnings derived from the employment, less any expenses deducted under regulation 25(3)(a), (4)(a), (5) or (6), as the case may be;

(b) except where sub-paragraph (c)(iii) applies, in the case of employment as a child minder one third of the earnings of that employment; or

(c) where regulation 17(3) (normal weekly earnings of self-employed earners) applies—

(i) in the case of a self-employed earner who is engaged in employment on his own account, the claimant’s estimated earnings from the employment, less the amount of the deductions likely to be made and, where appropriate, made under regulation 25(3)(a),

(ii) in the case of a self-employed earner whose employment is carried on in partnership or is that of a share fisherman within the meaning of the Social Security (Mariners' Benefits) Regulations (Northern Ireland) 1975, the claimant’s estimated and, where appropriate, his share of the actual earnings from the employment, less the amount of his share of the expenses likely to be deducted and, where appropriate, deducted under regulation 25(5), or

(iii) in the case of employment as a child minder, one third of the claimant’s estimated and, where appropriate, actual earnings from that employment.

(1)

Section 7(1) was amended by Article 3 of the Social Security and Family Allowances (Northern Ireland) Order 1976, Article 11(1) of the Health and Social Security (Northern Ireland) Order 1984 (S.I. 1984/1158 (N.I. 8)) and Article 3(a) of S.R. 1991 No. 542

(2)

Section 7(5) was amended by Article 3(b) of S.R. 1991 No. 542

(3)

Section 9(2) was amended by Article 5 of S.R. 1982 No. 413 and Article 5 of S.R. 1991 No. 542