Citation and commencement

1.  These Regulations may be cited as the Social Security (Scottish Rate of Income Tax etc.) (Amendment) Regulations 2016 and come into force on 6th April 2016.

Amendments to the Income Support (General) Regulations 1987

2.—(1) The Income Support (General) Regulations 1987(6) are amended as follows.

(2) In regulation 2(1) (interpretation) after the definition of “remunerative work” insert—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007(7);

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998(8);”.

(3) In regulation 39(1) (deduction of tax and contributions for self-employed earners)—

(a)after “basic rate” in the first place it appears insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(b)for “personal allowance to which the claimant is entitled under section 257(1) of the Income and Corporation Taxes Act 1988 (personal allowance) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007(9) as are”;

(c)after “basic rate” in the second place it appears insert “, or the Scottish basic rate,”; and

(d)for “personal allowance” in the second place it appears substitute “personal reliefs”.

(4) In regulation 39D (deduction in respect of tax for participants in the self-employment route)—

(a)for paragraph (1)(b) substitute—

“(b)the personal reliefs applicable to the person receiving assistance under the self-employment route under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 are allowable against that income;”;

(b)in paragraph (1)(c)—

(i)for “relief” substitute “reliefs”; and

(ii)after “basic rate” insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”; and

(c)in paragraph (2)—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “personal allowance” substitute “personal reliefs”.

(5) In regulation 42(8)(a) (notional income)—

(a)after “basic rate” in the first place it appears insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(b)for “personal allowance to which the claimant is entitled under section 257(1) of the Income and Corporation Taxes Act 1988 (personal allowance) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”;

(c)after “basic rate” in the second place it appears insert “, or the Scottish basic rate,”; and

(d)for “personal allowance” in the second place it appears substitute “personal reliefs”.

Amendments to the Jobseeker’s Allowance Regulations 1996

3.—(1) The Jobseeker’s Allowance Regulations 1996(10) are amended as follows.

(2) In regulation 1(3) (interpretation) after the definition of “sandwich course” insert—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007;

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998;”.

(3) In regulation 102 (deduction of tax and contributions for self-employed earners)—

(a)for paragraph (1)(b) substitute—

“(b)as if that income were assessable to income tax at the basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to their circumstances.”; and

(b)in paragraph (2)—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “personal allowance deductible under paragraph (1) is” substitute “personal reliefs deductible under paragraph (1) are”.

(4) In regulation 102D (deduction in respect of tax for participants in the self-employment route)—

(a)for paragraph (1)(b) and (c) substitute—

“(b)the personal reliefs applicable to the person receiving assistance under the self-employment route under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 are allowable against that income; and

(c)the rate at which the chargeable income less the personal reliefs is assessable to income tax is the basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax.”; and

(b)in paragraph (2)—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “personal allowance” substitute “personal reliefs”.

(5) In regulation 105(15)(a) (notional income)—

(a)after “basic rate” in the first place it appears insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(b)for “personal allowance to which the claimant is entitled under section 257(1) of the Income and Corporation Taxes Act 1988 (personal allowance) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”;

(c)after “basic rate” in the second place it appears insert “, or the Scottish basic rate,”; and

(d)for “personal allowance” in the second place it appears substitute “personal reliefs”.

(6) In regulation 163(4) (calculation of earnings – share fishermen)—

(a)after sub-paragraph (b) insert—

“(ba)in paragraph (3) for “Subject to paragraph (4), the” substitute “The”;”; and

(b)in sub-paragraph (d), (in the inserted paragraph (6)),—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “relief” substitute “reliefs”.

Amendments to the Housing Benefit Regulations 2006

4.—(1) The Housing Benefit Regulations 2006(11) are amended as follows.

(2) In regulation 2(1) (interpretation) after the definition of “Rent Officers Order” insert—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007;

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998;”.

(3) In regulation 34 (disregard of changes in tax, contributions etc.)—

(a)after paragraph (a) insert—

“(aa)in the Scottish basic or other rates of income tax;”; and

(b)in paragraph (b) for “relief” substitute “reliefs under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007”.

(4) In regulations 36(6)(a) (calculation of net earnings of employed earners), 39(1) (deduction of tax and contributions of self-employed earners) and 42(12)(a) (notional income)—

(a)after “basic rate” in the first place it appears insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(b)for “personal relief to which the claimant is entitled under section 257(1) of the Income and Corporation Taxes Act 1988 (personal allowances) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”;

(c)after “basic rate” in the second place it appears insert “, or the Scottish basic rate,”; and

(d)for “relief” in the second place it appears substitute “reliefs”.

Amendments to the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006

5.—(1) The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006(12) are amended as follows.

(2) In regulation 2(1) (interpretation) after the definition of “savings credit” insert—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007;

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998;”.

(3) In regulation 34 (disregard of changes in tax, contributions etc.)—

(a)after paragraph (a) insert—

“(aa)in the Scottish basic or other rates of income tax;”; and

(b)in paragraph (b) for “relief” substitute “reliefs under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007”.

(4) In regulation 36(5)(a) (calculation of net earnings of employed earners)—

(a)after “basic rate” in the first place it appears insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(b)for “personal relief to which the claimant is entitled under section 257(1) of the Income and Corporation Taxes Act 1988 (personal allowances) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”;

(c)after “basic rate” in the second place it appears insert “, or the Scottish basic rate,”; and

(d)for “relief” in the second place it appears substitute “reliefs”.

(5) In regulation 40(1) (deduction of tax and contributions of self-employed earners)—

(a)after “basic rate” in the first place it appears insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(b)for “personal relief to which the claimant is entitled under sections 257(1) of the Income and Corporation Taxes Act 1988 (personal allowances) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”; and

(c)after “basic rate” in the second place it appears insert “, or the Scottish basic rate,”.

Amendments to the Employment and Support Allowance Regulations 2008

6.—(1) The Employment and Support Allowance Regulations 2008(13) are amended as follows.

(2) In regulation 2(1) (interpretation) after the definition of “remunerative work” insert—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007;

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998;”.

(3) In regulation 99 (deduction of tax and contributions for self-employed earners)—

(a)in paragraph (1) for the words from “basic rate” to the end substitute “basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to the claimant’s circumstances”; and

(b)in paragraph (2)—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “paragraph (1) is” substitute “paragraph (1) are”.

(4) In regulation 103 (deduction in respect of tax for participants in the self-employment route)—

(a)for paragraph (1)(b) substitute—

“(b)the personal reliefs applicable to the person receiving assistance under the self-employment route under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 are allowable against that income;”;

(b)in paragraph (1)(c)—

(i)for “personal allowance” substitute “personal reliefs”; and

(ii)after “basic rate” insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”; and

(c)in paragraph (2) for “basic rate of tax to be applied and the amount of the personal allowance deductible is” substitute “basic rate, or the Scottish basic rate, of tax to be applied and the amount of personal reliefs deductible are”.

(5) In regulation 109(2) (notional income—calculation and interpretation)—

(a)in sub-paragraph (a) for the words from “basic rate” to the end substitute “basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax in the year of assessment less only personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to the claimant’s circumstances”; and

(b)in sub-paragraph (b)—

(i)omit “if”;

(ii)after “the basic rate” insert “, or the Scottish basic rate,”; and

(iii)for “personal allowance deductible under this paragraph is” substitute “personal reliefs deductible under this paragraph are”.

Amendments to the Jobseeker’s Allowance Regulations 2013

7.—(1) The Jobseeker’s Allowance Regulations 2013(14) are amended as follows.

(2) In regulation 2(2) (interpretation) after the definition of “remunerative work” insert—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007;

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998;”.

(3) In regulation 62 (deduction of tax and contributions for self-employed earners)—

(a)for paragraph (1)(b) substitute—

“(b)as if that income were assessable to income tax at the basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to their circumstances;”; and

(b)in paragraph (2)—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “personal allowance deductible under paragraph (1) is” substitute “personal reliefs deductible under paragraph (1) are”.

(4) In regulation 63 (notional earnings)—

(a)in paragraph (8)(a)(ii)—

(i)for “starting rate” substitute “basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate,”; and

(ii)for “personal allowance” substitute “personal reliefs”; and

(b)for paragraph (11) substitute—

“(11) For the purposes of paragraph (8)(a)(i), the amount is calculated by applying to those earnings the basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax in the year of assessment less only the personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to the claimant’s circumstances.”.

(5) In regulation 73(4) (calculation of earnings – share fishermen)—

(a)after sub-paragraph (b) insert—

“(ba)in paragraph (3) for “Subject to paragraph (4), the” substitute “The”;”; and

(b)in sub-paragraph (d), (in the inserted paragraph (6)),—

(i)after “basic rate” insert “, or the Scottish basic rate,”; and

(ii)for “relief” substitute “reliefs”.

Amendments to the Employment and Support Allowance Regulations 2013

8.  In regulation 84 of the Employment and Support Allowance Regulations 2013 (deduction of tax and contributions for self-employed earners)(15)—

(a)in paragraph (1)—

(i)after “basic rate” insert “, or in the case of a Scottish taxpayer, the Scottish basic rate,”; and

(ii)for “personal allowance to which the claimant is entitled under sections 35 and 38 to 40 of the Income Tax Act 2007 (personal reliefs) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”;

(b)in paragraph (2) after “basic rate” insert “, or the Scottish basic rate,”; and

(c)in paragraph (4), at the end, add—

““Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007;

“Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998”.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Income Support (General) Regulations 1987 (S.I. 1987/1967) (see regulation 2), the Jobseeker’s Allowance Regulations 1996 (S.I. 1996/207) (see regulation 3), the Housing Benefit Regulations 2006 (S.I. 2006/213) (see regulation 4), the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (S.I. 2006/214) (see regulation 5), the Employment and Support Allowance Regulations 2008 (S.I. 2008/794) (see regulation 6), the Jobseeker’s Allowance Regulations 2013 (S.I. 2013/378) (see regulation 7) and the Employment and Support Allowance Regulations 2013 (S.I. 2013/379) (see regulation 8).

In each of the above Regulations provision is made for the calculation or estimation of income so as to enable the Secretary of State to determine the amount of benefit a claimant should be awarded. Broadly, the income of a self-employed claimant is calculated by determining the claimant’s net profit over a representative period and then deducting (amongst other liabilities) an amount in respect of income tax, based on the basic rate of tax applicable to that period.

These Regulations amend the provisions relating to calculation or estimation of income in consequence of the power of the Scottish Parliament to set a Scottish rate of income tax provided for in Part 4A of the Scotland Act 1998 (c. 46). The power is first being exercised for the tax year 2016-2017.

These Regulations introduce definitions of a “Scottish taxpayer” and the “Scottish basic rate” of tax into each of the above Regulations and add references to the “Scottish basic rate” of tax to the existing references to the basic rate of tax.

These Regulations also update references to “personal allowance” and “personal reliefs”, in each of the Regulations in question, so as to refer to the relevant provisions of the Income Tax Act 2007 (c. 3).

An impact assessment has not been produced for this instrument as it has no impact on business or civil society organisations.