Finance Act 1994

139 Taxation of incapacity benefit. E+W+S+N.I.

(1) For the year 1995-96 and subsequent years of assessment incapacity benefit, except—

(a) benefit payable for an initial period of incapacity, and

(b) so much of any benefit as is attributable in any case to an increase in respect of a child,

shall be treated as income for the purposes of the Income Tax Acts and charged to income tax under Schedule E.

(2) Subsection (1) above shall not apply to incapacity benefit to which a person is entitled for any day of incapacity for work falling in a period of incapacity for work which is treated for the purposes of that benefit as having begun before 13th April 1995 if the part of that period which is treated as having fallen before that date includes a day for which that person was entitled to invalidity benefit.

(3) Incapacity benefit shall for the purposes of this section be a benefit in relation to which section 41 of the M1 Finance Act 1989 (year of assessment in which benefit to be charged) applies.

(4) Enactments relating to the payment of incapacity benefit shall have effect subject to such provision as may be contained for the purposes of this section in regulations under section 203 of the Taxes Act 1988 (PAYE regulations).

(5) In this section—

• “incapacity benefit” means any benefit which by virtue of provisions contained in the Social Security (Incapacity for Work) Act 1994 or any corresponding provisions made for Northern Ireland is to be known as incapacity benefit;

• [F1 “initial period of incapacity”, in relation to incapacity benefit, means any period for which short-term incapacity benefit is payable otherwise than at the higher rate; and]

• “invalidity benefit” means invalidity benefit under Part II of the M2 Social Security Contributions and Benefits Act 1992 or under Part II of the M3 Social Security Contributions and Benefits (Northern Ireland) Act 1992.

[F2 (6) The reference in subsection (5) above to short-term incapacity benefit payable at the higher rate shall be construed in accordance with sections 30B(5), 40(8) and 41(7) of the M4 Social Security Contributions and Benefits Act 1992 and the corresponding provisions of the M5 Social Security Contributions and Benefits (Northern Ireland) Act 1992.]

Annotations:

Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F1 S. 139(5): Definition of “initial period of incapacity” substituted (retrospectively) by 1995 c. 4, s. 141(2)

F2 S. 139(6) inserted (retrospectively) by 1995 c. 4, s. 141(3)

Marginal Citations

M1 1989 c. 26.

M2 1992 c. 4.

M3 1992 c. 7.

M4 1992 c. 4.

M5 1992 c. 7.

139 Taxation of incapacity benefit. E+W+S+N.I.

(1) For the year 1995-96 and subsequent years of assessment incapacity benefit, except—

(a) benefit payable for an initial period of incapacity, and

(b) so much of any benefit as is attributable in any case to an increase in respect of a child,

shall be treated as income for the purposes of the Income Tax Acts and charged to income tax under Schedule E.

(2) Subsection (1) above shall not apply to incapacity benefit to which a person is entitled for any day of incapacity for work falling in a period of incapacity for work which is treated for the purposes of that benefit as having begun before 13th April 1995 if the part of that period which is treated as having fallen before that date includes a day for which that person was entitled to invalidity benefit.

(3) Incapacity benefit shall for the purposes of this section be a benefit in relation to which section 41 of the M1 Finance Act 1989 (year of assessment in which benefit to be charged) applies.

(4) Enactments relating to the payment of incapacity benefit shall have effect subject to such provision as may be contained for the purposes of this section in regulations under section 203 of the Taxes Act 1988 (PAYE regulations).

(5) In this section—

• “incapacity benefit” means any benefit which by virtue of provisions contained in the Social Security (Incapacity for Work) Act 1994 or any corresponding provisions made for Northern Ireland is to be known as incapacity benefit;

• “initial period of incapacity”, in relation to incapacity benefit, means any period for which that benefit is payable as short-term incapacity benefit at the rate which (apart from any increase or addition) is the lower of the rates applicable to short-term incapacity benefit; and

• “invalidity benefit” means invalidity benefit under Part II of the M1 Social Security Contributions and Benefits Act 1992 or under Part II of the M1 Social Security Contributions and Benefits (Northern Ireland) Act 1992.

Annotations:

Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Marginal Citations

M1 1989 c. 26.

M1 1992 c. 4.

M1 1992 c. 7.