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House of Commons

Session 2002 - 03 Internet Publications Other Bills before Parliament

Income Tax (Earnings and Pensions) Bill

Income Tax (Earnings and Pensions) Bill Part 10 — Social security income Chapter 4 — Taxable UK social security benefits: exemptions     311
Income support
665   Exempt unless payable to member of couple involved in trade dispute
(1)    No liability to income tax arises on income support unless—
(a)           the income support is payable to one member of a married or
unmarried couple (“the claimant”), and	5
(b)           section 126 of SSCBA 1992 or section 125 of SSCB(NI)A 1992 (trade
disputes) applies to the claimant but not to the other member of the
couple.
(2)    In this section “married couple” and “unmarried couple” have the same
meaning as in section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A	10
1992.
666   Child maintenance bonus
No liability to income tax arises on a part of income support which is
attributable to a child maintenance bonus (within the meaning of section 10 of
CSA 1995 or Article 4 of CS(NI)O 1995).	15
667   Amounts in excess of taxable maximum
(1)    If the amount of income support paid to a person (“the claimant”) for a week
or a part of week exceeds the claimant’s taxable maximum for that period, no
liability to income tax arises on the excess.
(2)    The claimant’s taxable maximum for a period is determined under section 668.	20
668   Taxable maximum
(1)    A claimant’s taxable maximum for a week is determined under this subsection
if the applicable amount for the purpose of calculating the income support
consists only of an amount in respect of the relevant couple.
The taxable maximum is equal to one half of the applicable amount.	25
(2)    A claimant’s taxable maximum for a week is determined under this subsection
if the applicable amount includes amounts that are not in respect of the
relevant couple.
The taxable maximum is equal to one half of the amount which is included in
the applicable amount in respect of the relevant couple.	30
(3)    A claimant’s taxable maximum for a part of a week is determined as follows—
Step 1
Assume that the income support is paid to the claimant for the whole of, rather
than part of, the week.
Step 2	35
Determine under subsection (1) or (2) what the claimant’s taxable maximum
for that week would be on that assumption.
Step 3
Determine the claimant’s taxable maximum for the part of the week using this
formula—	40
Income Tax (Earnings and Pensions) Bill Part 10 — Social security income Chapter 4 — Taxable UK social security benefits: exemptions     312
where—
N is the number of days in the part of the week for which the claimant is
actually paid the income support, and
TMW is the taxable maximum for the whole week determined under step
2.	5
669   Interpretation
(1)    In sections 667 and 668, except in relation to Northern Ireland—
“applicable amount” means the amount prescribed in relation to income
support in regulations made under section 135 of SSCBA 1992;
“married couple” and “unmarried couple” have the same meaning as in	10
section 137(1) of SSCBA 1992.
(2)    In sections 667 and 668, in relation to Northern Ireland—
“applicable amount” means the amount prescribed in relation to income
support in regulations made under section 131 of SSCB(NI)A 1992;
“married couple” and “unmarried couple” have the same meaning as in	15
section 133(1) of SSCB(NI)A 1992.
(3)    In section 668 “relevant couple”, in relation to a claimant, means the married or
unmarried couple of which the claimant is a member.
Jobseeker’s allowance
670   Child maintenance bonus	20
No liability to income tax arises on a part of a jobseeker’s allowance which is
attributable to a child maintenance bonus (within the meaning of section 10 of
CSA 1995 or Article 4 of CS(NI)O 1995).
671   Amounts in excess of taxable maximum
(1)    If the amount of jobseeker’s allowance paid to a person (“the claimant”) for a	25
week or a part of a week exceeds the claimant’s taxable maximum for that
period, no liability to income tax arises on the excess.
(2)    The claimant’s taxable maximum for a period is determined under sections 672
to 674.
672   Taxable maximum: general	30
(1)    A claimant’s taxable maximum for a week is determined—
(a)           under section 673, if the claimant is paid an income-based jobseeker’s
allowance for that week, or
(b)           under section 674, if the claimant is paid a contribution-based
jobseeker’s allowance for that week.	35
(2)    A claimant’s taxable maximum for a part of a week is determined as follows—
Step 1
Assume that the jobseeker’s allowance is paid to the claimant for the whole of,
rather than part of, the week.
Step 2	40
Income Tax (Earnings and Pensions) Bill Part 10 — Social security income Chapter 4 — Taxable UK social security benefits: exemptions     313
Determine under section 673 or 674 what the claimant’s taxable maximum for
that week would be on that assumption.
Step 3
Determine the claimant’s taxable maximum for the part of the week using this
formula—	5
where—
N is the number of days in the part of the week for which the claimant is
actually paid the jobseeker’s allowance, and
TMW is the taxable maximum for the whole week determined under step
2.	10
673   Taxable maximum: income-based jobseeker’s allowance
(1)    A claimant’s taxable maximum for a week is determined under this section if—
(a)           the claimant is paid an income-based jobseeker’s allowance for that
week, or
(b)           the claimant is assumed under section 672(2) to be paid an income-	15
based jobseeker’s allowance for that week.
(2)    If the claimant is not a member of a married or unmarried couple, the
claimant’s taxable maximum for the week is equal to the age-related amount
which would be applicable to the claimant if a contribution-based jobseeker’s
allowance were payable to the claimant for that week.	20
(3)    If the claimant is a member of a married or unmarried couple, the claimant’s
taxable maximum for the week is equal to the portion of the applicable amount
which is included in the jobseeker’s allowance in respect of the couple for that
week.
(4)    But if—	25
(a)           the claimant is a member of a married or unmarried couple, and
(b)           the other member of that couple is prevented by section 14 of JSA 1995
or Article 16 of JS(NI)O 1995 (trade disputes) from being entitled to a
jobseeker’s allowance,
the claimant’s taxable maximum for that week is equal to half the portion of the	30
applicable amount which is included in the jobseeker’s allowance in respect of
the couple for that week.
674   Taxable maximum: contribution-based jobseeker’s allowance
(1)    A claimant’s taxable maximum for a week is determined under this section if—
(a)           the claimant is paid a contribution-based jobseeker’s allowance for that	35
week, or
(b)           the claimant is assumed under section 672(2) to be paid a contribution-
based jobseeker’s allowance for that week.
(2)    If the claimant is not a member of a married or unmarried couple, the
claimant’s taxable maximum for the week is equal to the age-related amount	40
which is applicable to the claimant for that week.
(3)    If the claimant is a member of a married or unmarried couple, the claimant’s
taxable maximum for the week is equal to the portion of the applicable amount
Income Tax (Earnings and Pensions) Bill Part 10 — Social security income Chapter 5 — UK social security benefits wholly exempt from income tax     314
(3)    which would be included in the jobseeker’s allowance in respect of the couple
if an income-based jobseeker’s allowance were payable to the claimant for that
week.
675   Interpretation
(1)    In sections 671 to 674, except in relation to Northern Ireland—	5
“age-related amount” and “applicable amount” mean the amounts
determined as such in accordance with regulations made under section
4 of JSA 1995;
“contribution-based jobseeker’s allowance” and “income-based
jobseeker’s allowance” have the same meaning as in section 1(4) of JSA	10
1995;
“married couple” and “unmarried couple” have the same meaning as in
section 35(1) of JSA 1995.
(2)    In sections 671 to 674, in relation to Northern Ireland—
“age-related amount” and “applicable amount” mean the amounts	15
determined as such in accordance with regulations made under Article
6 of JS(NI)O 1995;
“contribution-based jobseeker’s allowance” and “income-based
jobseeker’s allowance” have the same meaning as in Article 3(4) of
JS(NI)O 1995;	20
“married couple” and “unmarried couple” have the same meaning as in
Article 2(2) of JS(NI)O 1995.
Increases in respect of children
676   Increases in respect of children
No liability to income tax arises on a part of a taxable benefit listed in Table A	25
which is attributable to an increase in respect of a child.
Chapter 5
UK social security benefits wholly exempt from income tax
677   UK social security benefits wholly exempt from tax: Table B
(1)    No liability to income tax arises on the United Kingdom social security benefits	30
listed in Table B.
TABLE B — PART 1
Income Tax (Earnings and Pensions) Bill Part 10 — Social security income Chapter 5 — UK social security benefits wholly exempt from income tax     315
BENEFITS PAYABLE UNDER PRIMARY LEGISLATION
Social security benefit Payable under     Attendance allowance SSCBA 1992 Section 64       SSCB(NI)A 1992 Section 64     Back to work bonus JSA 1995 Section 26   5     JS(NI)O 1995 Article 28     Bereavement payment SSCBA 1992 Section 36       SSCB(NI)A 1992 Section 36     Carer’s allowance SSCBA 1992 Section 70       SSCB(NI)A 1992 Section 70   10   Child benefit SSCBA 1992 Section 141       SSCB(NI)A 1992 Section 137     Child’s special allowance SSCBA 1992 Section 56       SSCB(NI)A 1992 Section 56     Child tax credit TCA 2002 Part 1   15   Council tax benefit SSCBA 1992 Section 131     Disability living allowance SSCBA 1992 Section 71       SSCB(NI)A 1992 Section 71     Guardian’s allowance SSCBA 1992 Section 77       SSCB(NI)A 1992 Section 77   20   Housing benefit SSCBA 1992 Section 130       SSCB(NI)A 1992 Section 129     Industrial injuries benefit (apart SSCBA 1992 Section 94     from industrial death benefit) SSCB(NI)A 1992 Section 94     Pensioner’s Christmas bonus SSCBA 1992 Section 148   25     SSCB(NI)A 1992 Section 144     Payments out of the social fund SSCBA 1992 Section 138       SSCB(NI)A 1992 Section 134     Severe disablement allowance SSCBA 1992 Section 68       SSCB(NI)A 1992 Section 68   30   State maternity allowance SSCBA 1992 Section 35       SSCB(NI)A 1992 Section 35     State pension credit SPCA 2002 Section 1       SPCA(NI) 2002 Section 1     Working tax credit TCA 2002 Part 1   35
TABLE B — PART 2
Income Tax (Earnings and Pensions) Bill Part 10 — Social security income Chapter 6 — Taxable foreign benefits     316
BENEFITS PAYABLE UNDER REGULATIONS
Social security benefit Payable under regulations made under     Compensation payments where CSA 1995 Section 24     child support reduced because CS(NI)O 1995 Article 17     of a change in legislation       5   Payments to reduce under- WRPA 1999 Section 79     occupation by housing benefit WRP(NI)O 1999 Article 70     claimants
(2)    Industrial death benefit is charged to tax under Part 9 (see section 577).	10
(3)    In this section “industrial death benefit” means any benefit payable under—
(a)           section 94 of, and Part 6 of Schedule 7 to, SSCBA 1992, or
(b)           section 94 of, and Part 6 of Schedule 7 to, SSCB(NI)A 1992.
Chapter 6
Taxable foreign benefits	15
678   Taxable benefits: foreign benefits
(1)    This section applies to any benefit which is payable under the law of a country or
territory outside the United Kingdom if—
(a)           it is substantially similar in character to a benefit listed in Table A, and
(b)           it is payable to a person resident in the United Kingdom.	20
(2)    But this section does not apply to a benefit which is charged to tax under Part
9 (pension income).
679   Taxable social security income
(1)    If section 678 applies, the taxable social security income for a taxable benefit for
a tax year is the amount on which tax would be chargeable if the benefit were	25
chargeable to tax under Case V of Schedule D (see in particular the provisions
of ICTA listed in subsection (2)).
(2)    Those provisions of ICTA are—
(a)           sections 65 and 68 (calculation of the amount of the income on which
tax is to be charged in the tax year);	30
(b)           section 584 (relief for unremittable overseas income);
(c)           section 585 (relief on delayed remittances).
680   Person liable for tax
The person liable for any tax charged under this Part on a benefit to which
section 678 applies is the person receiving or entitled to the benefit.	35
Income Tax (Earnings and Pensions) Bill Part 11 — Pay As You Earn Chapter 1 — Introduction     317
Chapter 7
Taxable and other foreign benefits: exemptions
681   Taxable and other foreign benefits: exemptions
(1)    No liability to income tax arises on a taxable foreign benefit if, or to the extent
that, the corresponding UK benefit is exempt income.	5
(2)    No liability to income tax arises on a benefit which is payable under the law of
a country or territory outside the United Kingdom if it is substantially similar
in character to a United Kingdom social security benefit listed in Table B.
(3)    In this section—
“taxable foreign benefit” means a benefit to which section 678 applies;	10
“corresponding UK benefit”, in relation to a taxable foreign benefit, means
the taxable benefit listed in Table A to which the foreign benefit is
substantially similar in character (see section 678).
Part 11
Pay As You Earn	15
Chapter 1
Introduction
682   Scope of this Part
(1)    This Part provides for the assessment, collection and recovery of income tax in
respect of PAYE income.	20
(2)    The provisions of this Part are contained in—
this Chapter (which gives the meaning of “PAYE income”),
Chapter 2 (PAYE: general),
Chapter 3 (PAYE: special types of payer or payee),
Chapter 4 (PAYE: special types of income),	25
Chapter 5 (PAYE settlement agreements), and
Chapter 6 (miscellaneous and supplemental).
(3)    Provision for PAYE regulations is made by Chapters 2 to 6.
683   PAYE income
(1)    For the purposes of this Act and any other enactment (whenever passed)	30
“PAYE income” for a tax year consists of—
(a)           any PAYE employment income for the year,
(b)           any PAYE pension income for the year, and
(c)           any PAYE social security income for the year.
(2)    “PAYE employment income” for a tax year means income which consists of—	35
(a)           any taxable earnings from an employment in the year (determined in
accordance with section 10(2)), and

© Parliamentary copyright 2002	Revised 4 December 2002