Section 9(4).
1In this Schedule—
(a)" the Act of 1968 " means the [1968 c. 3.] Capital Allowances Act 1968 ;
(b)" the Act of 1970 " means the [1970 c. 10.] Income and Corporation Taxes Act 1970 ; and
(c)" year " means year of assessment within the meaning of the Act of 1970.
2Subject to the following paragraphs. Class 4 contributions shall be payable in respect of the full amount of all profits or gains of any relevant trade, profession or vocation chargeable to income tax under Case I or n of Schedule D, subject to—
(a)deductions for—
(i)allowances which under section 70(2) of the Act of 1968 fall to be made as a deduction in charging the profits or gains to income tax, and
(ii)any allowance the amount of which falls to be given by way of discharge or repayment of income tax under section 71 of that Act,
where in either case the allowance arises from activities of any relevant trade, profession or vocation ; and
(b)additions for any such charges as under section 70(6) of that Act fall to be made for purposes of income tax on the profits or gains.
3(1)For the purposes of computing the amount of profile or gains in respect of which Class 4 contributions are payable, relief shall be available under, and in the manner provided by, the following provisions of the Act of 1970, that is to say—
(a)section 168 (set-off of trade losses against general income), but only where loss arises from activities the profits or gains of which would be brought into computation for the purposes of Class 4 contributions ;
(b)section 169 (extension of right of set-off to capital allowances);
(c)section 171 (carry-forward of loss against subsequent profits);
(d)section 174 (carry-back of terminal losses).
(2)The following relief provisions shall not apply, that is to say—
(a)Chapter H of Part I of the Act of 1970 (personal reliefs);
(b)sections 226 and 227 of that Act (premiums or other consideration under annuity contracts and trust schemes);
(c)section 75 of the [1972 c. 41.] Finance Act 1972 (relief for payment of interest);
(d)section 173 of the Act of 1970 (carry-forward as losses of amounts to be taxed under section 53) ; and
(e)section 175 of that Act (treatment of interest as a loss for purposes of carry-forward or carry-back).
(3)Where in a year beginning on or after 6th April 1975 for which a person claims and is allowed relief by virtue of sub-paragraph (1) above there falls to be made in computing his total income for income tax purposes, or that of a person's wife or, as the case may be, a person's husband, a deduction in respect of any loss, and the deduction or part of it falls to be so made from income other than profits or gains of a trade, profession or vocation, the amount of the deduction made from the other income shall be treated as reducing the person's profits or gains (that is to say the profits or gains of any relevant tirade, profession or vocation as computed for the purpose of the charge to Class 4 contributions) for subsequent years (being deducted as far as may be from those of the immediately following year, whether or not he claims or is entitled to claim relief under this paragraph for that year, and, so far as it cannot be so deducted, then from those of the next year, and so on).
(4)Relief shall be allowed, in respect of—
(a)payments under section 52 or 53 of the Act of 1970 (annuities and other annual payments, etc.); or
(b)payments under section 75 of the Finance Act 1972 (relief for payment of interest), being payments for which relief from income tax is or can be given,
so far as incurred wholly or exclusively for the purposes of any relevant trade, profession or vocation, by way of deduction from or set-off against profits or gains chargeable to Class 4 contributions for the year in which the payments are made; and, in the case of any insufficiency of the profits or gains of that year, the payments shall be carried forward and deducted from, or set off against, the profits or gains of any subsequent year Obeing deducted or set off as far as may bo from or against the profits or gains of the immediately following year, whether or not relief can be claimed under this paragraph for that year, and so far as it cannot be so deducted, from or against those of the next year, and so on).
4(1)Chapter IV of Part I of the Act of 1970 shall apply for the purposes of Class 4 contributions as it applies for those of income tax ; and an application by a husband or wife for separate assessment under section 38 of that Act, and an election by them under section 23 of the [1971 c. 68.] Finance Act 1971 (separate taxation of wife's earnings) shall operate as respects liability for such contributions as it does for income tax, the wife being liable for Class 4 contributions in respect of her own profits or gains.
(2)Such an application or election as is referred to in sub-paragraph (1) above shall not be made separately for the purposes of Class 4 contributions apart from those of income tax.
(3)Where section 37 of the Act of 1970 applies and there is no separate assessment under section 38 of that Act and no election under section 23 of the Finance Act 1971, the wife's profits and gains are to be computed, for the purposes of Class 4 contributions, as if section 37 did not apply, but the contributions shall be assessed on, and recoverable from, the husband.
5(1)Where a trade or profession is carried on by two or more persons jointly, the liability of any one of them in respect of Class 4 contributions shall arise in respect of his share of the profits or gains of that trade or profession (so far as immediately derived by him from carrying it on); and for this purpose his share shall be aggregated with his share of the profits or gains of any other trade, profession or vocation (so far as immediately derived by him from carrying it on or exercising it).
(2)Where sub-paragraph (1) above applies, the Class 4 contributions for which a person is liable in respect of the profits or gains of the trade or profession carried on jointly (aggregated, where appropriate, as mentioned in that sub-paragraph) may either be charged on him separately or (to the extent only that the liability arises in respect of the profits or gains of that partnership) be the subject of a joint assessment to contributions made in the partnership name ; and Chapter VI of Part VI of the Act of 1970 shall apply accordingly, but substituting this paragraph for section 152.
6In any circumstances in which apart from this paragraph a person would—
(a)under section 72 of the [1970 c. 9.] Taxes Management Act 1970 be assessable and chargeable to Class 4 contributions as trustee, guardian, tutor, curator, or committee of an incapacitated person in respect of the profits or gains of a trade, profession or vocation ; or
(b)by virtue of section 114 of the Act of 1970 be assessed and charged to such contributions in respect of profits or gains received or receivable by him in the capacity of trustee,
such contributions shall not be payable either by him or by any other person.
7Section 88(1), (4) and (5)(a) and (b) of the [1970 c. 9.] Taxes Management Act 1970 (interest on tax recovered to make good loss due to taxpayer's fault) shall apply in relation to any amount due in respect of Class 4 contributions as it applies in relation to income tax ; but section 86 of that Act (interest on amounts overdue) shall not apply.
8Where an assessment has become final and conclusive for the purposes of income tax for any year, that assessment shall also be final and conclusive for the purposes of computing liability for Class 4 contributions ; and no allowance or adjustment of liability, on the ground of diminution of income or loss, shall be taken into account in computing profits or gains chargeable to Class 4 contributions unless that allowance or adjustment has previously been made on an application under the special provisions of the Income Tax Acts relating thereto, or falls to be allowed under paragraph 3(4) of this Schedule.
9The provisions of Part V of the Taxes Management Act 1970 (appeals, etc.) shall apply with the necessary modifications in relation to Class 4 contributions as they apply in relation to income tax ; but nothing in the Income Tax Acts shall apply with respect to the determination of any question arising—
(a)under section 9(7) of this Act or section 9(4) of the [1975 c. 15.] Social Security (Northern Ireland) Act 1975 as to whether by regulations under that subsection a person is excepted from liability for Class 4 contributions, or his liability is deferred; or
(b)under regulations made by virtue of section 9(9) or 10 of this Act or section 9(6) or 10 of the Social Security (Northern Ireland) Act 1975.