Finance Act 1946

27 Insurance contributions, family allowances and insurance benefit.

(1) The amount of any contribution paid by any person under the National Insurance Act shall be deducted from or set off against any income of that person for the year of assessment in which the contribution is paid, and tax shall, where necessary, be discharged or repaid accordingly, and the ' total income of that person for that year of assessment shall be calculated accordingly for all the purposes of the Income Tax Acts, and no relief or deduction shall be given or allowed under any other provision of those Acts in respect of any contribution in respect of which relief can be given under this subsection :

Provided that nothing in this subsection—

(a) shall be construed as allowing any amount to be deducted from or set off against any income of any person in respect of any contribution paid by him on behalf of , any other person ; or

(b) shall apply to any employer's contribution which, apart from this subsection, would be allowable as a deduction in computing the amount of any profits or gains, or would be included in computing the expenses of management in respect of which relief may be claimed under section thirty-three of the [8 & 9 Geo. 5. c. 40.] Income Tax Act, 1918, or would be included in computing the expenses of management or supervision in respect of which relief may be claimed under section twenty-six of the Finance Act, 1922.

(2) Subject to the provisions of this subsection, payments of benefit under the National Insurance Act, other than maternity grant and death grant, and payments on account of family allowances shall be charged to income tax under Schedule E on the amounts thereof for the year of assessment and shall be deemed to be earned income for all the purposes of the Income Tax Acts:

Provided that no such payment shall be treated by virtue of this subsection as earned income for the purposes of subsection (2) of section eighteen of the Finance Act, 1920 (which provides, in the case of married persons, for an increased personal allowance by reference to the wife's earned income) unless it is payable by way of unemployment benefit, sickness benefit or maternity allowance.

(3) In this section, the expression " the National Insurance Act " means any Act of the present Session (whether passed before, after, or at the same time as this Act) establishing an extended system of national insurance providing pecuniary payments by way of unemployment benefit, sickness benefit, maternity benefit, retirement pension, widows' benefit, guardian's allowance and death grant, or any Act of the Parliament of Northern Ireland passed for purposes similar to the purposes of that Act, and includes any enactment in so far as it amends any such Act, the expressions " contribution ", " employer's contribution ", " unemployment benefit ", " sickness benefit", " maternity allowance ", " maternity grant " and " death grant " have the same meanings as in the National Insurance Act, and the expression " family allowance " means a family allowance under the [8 & 9 Geo. 6. c. 41.] Family Allowances Act, 1945, under the Family Allowances Act (Northern Ireland), 1945, or under any enactment amending either of those Acts.

(4) A person who, by virtue of any provision of the National Insurance Act, suffers a deduction from his remuneration in respect of any contribution shall be deemed for the purposes of this section to have paid a contribution equal to the amount of the deduction.