Self-employed earningsU.K.
57.—(1) This regulation applies for the purpose of calculating earned income that is not employed earnings and is derived from carrying on a trade, profession or vocation (“self-employed earnings”).
(2) A person's self-employed earnings in respect of an assessment period are to be calculated by taking the amount of the gross profits (or, in the case of a partnership, the person's share of those profits) of the trade, profession or vocation and deducting from that amount—
(a)any payment made to HMRC in the assessment period in respect of the trade, profession or vocation by way of—
(i)Class 2 contributions [F1under section 11(2), (6) or (8)] of the Contributions and Benefits Act or any Class 4 contributions payable under section 15 of that Act, or
(ii)income tax; and
(b)any relievable pension contributions made by the person in the assessment period (unless a deduction has been made in respect of those contributions in calculating a person's employed earnings).
(3) The gross profits of the trade, profession or vocation in respect of an assessment period are the actual receipts in that period less any deductions for expenses allowed under regulation 58 or 59.
(4) The receipts referred to in paragraph (3) include receipts in kind and any refund or repayment of income tax, value added tax or national insurance contributions relating to the trade, profession or vocation.
[F2(5) Where the purchase of an asset has been deducted as an expense in any assessment period and, in a subsequent assessment period, the asset is sold or ceases to be used for the purposes of a trade, profession or vocation carried on by the person, the proceeds of sale (or, as the case may be, the amount that would be received for the asset if it were sold at its current market value) are to be treated as a receipt in that subsequent assessment period.]
Textual Amendments
F1Words in reg. 57(2)(a)(i) substituted (6.4.2015) by The Social Security (Miscellaneous Amendments No. 2) Regulations 2015 (S.I. 2015/478), regs. 1(4), 36
F2Reg. 57(5) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Universal Credit and Miscellaneous Amendments (No.2) Regulations 2014 (S.I. 2014/2888), regs. 1(1), 4(3)