The Tax Credits (Definition and Calculation of Income) Regulations 2002

1. Any payment of an employment credit under a scheme under section 2(2) of the Employment Act known as “New Deal 50 plus” or the corresponding scheme under section 1 of the Employment and Training Act (Northern Ireland) 1950.
2. Any payment made—(a) under section 15 of the Disabled Persons (Employment Act) 1944 or section 15 of the Disabled Persons (Employment) Act (Northern Ireland) 1945 ; or(b) in accordance with arrangements made under section 2 of the Employment Act or section 1 of the Employment and Training Act (Northern Ireland) 1950 to assist disabled persons to obtain or retain employment despite their disability.
3. Any mandatory top-up payment made pursuant to—(a) section 2 of the Employment Act or section 1 of the Employment and Training Act (Northern Ireland) 1950 in respect of the claimant’s participation in—(i) an employment programme specified in regulation 75(1)(a)(ii)(bb) of the JSA Regulations or regulation 75(1)(a)(ii) of the JSA (NI) Regulations (Voluntary Sector Option of the New Deal);(ii) an employment programme specified in regulation 75(1)(a)(ii)(cc) of the JSA Regulations (Environmental Task Force Option of the New Deal) or regulation 75(1)(a)(iii) of the JSA (NI) Regulations; ... (iia) an employment programme specified in regulation 75(1)(a)(ii)(dd) of the JSA Regulations (Community Task Force); (iii) the Intensive Activity Period of the New Deal Pilots for 25 plus specified in regulation 75(1)(a)(iv) of the JSA Regulations or, in Northern Ireland, the Preparation for Employment Programme specified in regulation 75(1)(a)(v) of the JSA (NI) Regulations ; ...or (iv) the Backing Young Britain programme pursuant to arrangements made under section 2 of the Employment Act; (b) a written arrangement entered into between—(i) the Secretary of State and the person who has arranged for the claimant’s participation in the Intensive Activity Period of the New Deal for 25 plus and which is made in respect of his participation in that Period; or(ii) the Department for Employment and Learning and the person who has arranged for the claimant’s participation in the Preparation for Employment Programme and which is made in respect of the claimant’s participation in the Programme. This item applies only to the extent that the payment is not taxable as a profit of a trade, profession or vocation; or (c) the Steps to Work Programme specified in regulation 75(1)(a)(vi) of the Jobseeker’s Allowance Regulations (Northern Ireland) 1996.
4. Any discretionary payment pursuant to section 2 of the Employment Act, or, in Northern Ireland, section 1(1) of the Employment and Training Act (Northern Ireland) 1950 to meet, or help to meet, special needs in respect of the claimant’s participation in the Full-Time Education and Training Option of the New Deal as specified in regulation 75(1)(b)(ii) of the JSA Regulations or of the JSA (NI) Regulations.
5. Any—(a) education maintenance allowance in accordance with regulations made under section 518 of the Education Act 1996 (payment of school expenses; grant of scholarships etc.); or(b) payment (not within sub-paragraph (a)) in respect of a course of study attended by a child or qualifying young person payable—(i) in accordance with regulations made under section 518 of the Education (Scotland) Act 1980 (power to assist persons to take advantage of educational facilities) or section 12(2)(c) of the Further and Higher Education (Scotland) Act 1992 (provision of financial assistance to students); or(ii )by virtue of regulations made Article 50, 51 or 55(1) of the Education and Libraries (Northern Ireland) Order 1986 (provisions to assist persons to take advantage of educational facilities) .
6. Any payment made by an employment zone contractor payable in respect of the claimant’s participation in the employment zone programme by way of—(a) a training premium;(b) a discretionary payment, being a fee, grant, loan or otherwise; or(c) any arrears of subsistence allowance paid as a lump sum.
7. . . .
8. An amount of income equal to any qualifying maintenance payment within section 347B of the Taxes Act .
9. Any payment by way of qualifying care receipts to the extent that those receipts qualify for relief under Chapter 2 of Part 7 of the Income Tax (Trading and Other Income) Act 2005.
10. Any payment of maintenance, whether under a court order or not, which is made or due to be made by—(a) the claimant’s former partner, or the claimant’s partner’s former partner; or(b) the parent of a child or qualifying young person where that child or qualifying young person is a member of the claimant’s household except where that parent is the claimant or the claimant’s partner.
11. Any payment in respect of a child or qualifying young person who is a member of the claimant’s household made—(a) to adopters which is exempt from income tax by virtue of sections 744 to 746 of ITTOIA;(b) by a local authority in pursuance of paragraph 15(1) of Schedule 1 to the Children Act 1989 (local authority contribution to child’s maintenance);(bb) by a local authority by way of special guardianship support services pursuant to regulations under section 14F(1)(b) of the Children Act 1989; or(c) by an authority, as defined in Article 2 of the Children (Northern Ireland) Order 1995 , in pursuance of Article 15 of, and paragraph 17 of Schedule 1 to, that Order (contribution by an authority to child’s maintenance).
12. Any payment in respect of travelling expenses— (a) in relation to England under regulation 5, 6 or 12 of the National Health Service (Travel Expenses and Remission of Charges) Regulations 2003;(b) in relation to Wales under regulation 5, 6 or 11 of the National Health Service (Travelling Expenses and Remission of Charges) (Wales) Regulations 2007;(c) in relation to Scotland, under regulation 3, 5, or 11 of the National Health Service (Travelling Expenses and Remission of Charges) (Scotland) (No. 2) Regulations 2003;(d) in relation to Northern Ireland, under regulation 5, 6 or 11 of the Travelling Expenses and Remission of Charges Regulations (Northern Ireland) 2004; or(e) made by the Secretary of State for Health and Social Care, the Scottish Ministers, the Welsh Ministers or the Department of Health, Social Services and Public Safety and which is analogous to a payment specified in paragraph (a), (b), (c) or (d).
13. Any payment made by the Secretary of State or the Scottish Ministers under a scheme established to assist relatives and other persons to visit persons in custody.
14. Any payment under the Community Care (Direct Payments) Act 1996, section 57 of the Health and Social Care Act 2001, ... Article 15A of the Health and Personal Social Services (Direct Payments) (Northern Ireland) Order 1996 or regulations made under section 57 of the Health and Social Care Act 2001 (direct payments) , sections 50 to 53 of the Social Services and Well-being (Wales) Act 2014 or section 8 of the Carers and Direct Payments Act (Northern Ireland) 2002 or as a direct payment as defined in section 4(2) of the Social Care (Self-directed Support) (Scotland) Act 2013.
14A. Any payment made under the “Supporting People” programme—ain England and Wales, under section 93 of the Local Government Act 2000;bin Scotland, under section 91 of the Housing (Scotland) Act 2001; orcin Northern Ireland, under Article 4 of the Housing Support Services (Northern Ireland) Order 2002.
15. Any payment or a voucher provided under section 95 or 98 of the Immigration and Asylum Act 1999 for any former asylum-seeker or his dependants.
16. Any payment of a provident benefit by a trade union.Here—“provident benefit” has the meaning given in section 467(2) of the Taxes Act; and“trade union” has the meaning given in section 467(4) of the Taxes Act.
17. Armed forces independence payment under the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011.
18. Any payment made under the Welfare Supplementary Payment (Loss of Disability Living Allowance) Regulations (Northern Ireland) 2016, the Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016, Part 2 of the Welfare Supplementary Payments Regulations (Northern Ireland) 2016, or Parts 3 to 5 of the Welfare Supplementary Payment (Loss of Carer Payments) Regulations (Northern Ireland) 2016 .
19. Any payment made by the Scottish Ministers to a claimant who is, or who has been, in receipt of carer’s allowance under section 70 of the Contributions and Benefits Act (carer’s allowance) during the relevant tax year to supplement that allowance. ...
20. Any payment in respect of funeral expense assistance which is made by the Scottish Ministers to a claimant who has accepted responsibility for the expenses of a funeral to meet, or help towards meeting, those expenses.
21. Any payment made by the Scottish Ministers in respect of early years assistance, which is made for the purposes of meeting some of the costs associated with having, or expecting to have, a baby or child in the family.
22. Any discretionary financial assistance payment which is made by a Scottish local authority to a claimant who is in receipt of housing benefit provided by virtue of a scheme under section 123 of the Contributions and Benefits Act (income-related benefits) to meet, or help towards meeting, a claimant’s housing costs. ...
23. Any discretionary payment made pursuant to the Discretionary Support Regulations (Northern Ireland) 2016.
24. Any payment made under, or in connection with, the Windrush Compensation Scheme administered by the Home Office.
25. Any payment made, in accordance with arrangements made by the Scottish Ministers, to a person to whom an offer of employment has been made, in order to assist that person to retain employment, if—(a) that person—(i) was, at the date on which the offer of employment was made, at least 16 years of age but had not reached 25 years of age;(ii) had not been in employment at any time in the period of 6 months before the date on which that offer was made; and(iii) applies to the Scottish Ministers for assistance under arrangements made under section 2 of the Employment and Training Act 1973,within the period of one year beginning with the date on which that offer was made; or(b) that person—(i) was, at the date on which the offer of employment was made, aged at least 16 years of age but had not reached 26 years of age;(ii) had been looked after by a local authority on or after that person’s 16th birthday but was at the date that the offer of employment was made no longer looked after by a local authority; and(iii) applies to the Scottish Ministers for assistance under arrangements made under section 2 of the Employment and Training Act 1973 within the period of one year beginning with the date on which that offer was made.In this item “looked after by a local authority” has the same meaning as in regulation 2(interpretation) of the Child Tax Credit Regulations 2002.
26. Any payment of disability assistance under section 31 of the Social Security (Scotland) Act 2018.
27. Any payment made in accordance with arrangements made by the Scottish Ministers for, or in connection with, the abuse or neglect of a person whilst that person was a child who was under the care or responsibility of a body, society or organisation in Scotland.
28. Any payment made by the Scottish Ministers in accordance with regulations made under section 79 of the Social Security (Scotland) Act 2018 to a person in respect of a child for whom that person is responsible.
29. Any payment of young carer grant made under the Carer’s Assistance (Young Carers Grant) (Scotland) Regulations 2019.
30. Any payment in respect of short-term assistance given in accordance with section 36 of the Social Security (Scotland) Act 2018.
31. Any payment of winter heating assistance given in accordance with section 30 of the Social Security (Scotland) Act 2018.
32. Any payment made by the National Emergencies Trust (a registered charity established on 28th March 2019 with registered charity number: 1182809).
33. Any payment made under a scheme established by the Secretary of State in accordance with section 10 of the Northern Ireland (Executive Formation etc) Act 2019.
34. A payment, whether in cash or by way of a voucher, in lieu of free school meals.
35. A payment in connection with emergency volunteering leave under Schedule 7 to the Coronavirus Act 2020.
36. . . .
37. Any payment made under the scheme known as the NHS Test and Trace Self-Isolation Payment Scheme established on 1st September 2020 or the scheme known as the Test and Trace Support Payment scheme established on 28th September 2020 in respect of England or any other scheme established in any part of the United Kingdom for the purpose of providing financial support to people who are required to self-isolate due to coronavirus and cannot work from home ....
38. Any payment, made by or on behalf of the Scottish Ministers under Part 5 of the Welfare Food (Best Start Foods) (Scotland) Regulations 2019.
39. Any payment, funded by the Scottish Government, for the purpose of supporting women affected by complications after mesh implant surgery.
40. Any payment made under the scheme known as the Covid Winter Grant Scheme or the Covid Local Support Grant established under section 31 of the Local Government Act 2003 in respect of England or any corresponding schemes established by the Northern Ireland Executive, the Scottish Government or the Welsh Government for the purpose of providing financial support to families and vulnerable individuals to assist with the cost of food and utilities.
41. A payment made under the Covid-19 support scheme: working households receiving tax credits.
42. Any payment made under the scheme known as the “Household Support Fund” in respect of England or any corresponding schemes established by the Northern Ireland Executive, the Scottish Government or the Welsh Government.
43. Any payment made in accordance with the terms of the Homes for Ukraine Scheme to a person who has been approved under that scheme to provide accommodation to persons who are eligible under that scheme.In this item, “Homes for Ukraine Scheme” means the scheme established by the Department for Levelling Up, Housing and Communities on 18th March 2022 .
44. An award of compensation made under the Victims of Overseas Terrorism Compensation Scheme 2012 or any corresponding scheme established under section 47 of the Crime and Security Act 2010.
45. Any payment made by the Post Office or the Secretary of State for the purpose of providing compensation which is—(a) in connection with the failings of the Horizon System, or(b) otherwise payable following the judgment of Bates and Others v Post Office Limited((No. 3) “Common Issues”).In this item—(a) “the Horizon System”means a version of the computer system used by the Post Office known as Horizon, Horizon Legacy, Horizon Online or HNG-X;(b) “the Post Office” means Post Office Limited (registered number 02154540).46. Any payment made by a Scottish local authority to parents, under section 20 of the Local Government in Scotland Act 2003, as part of the scheme entitled Parental Transitions Support, to ease progression into work, the eligibility for which is dependent on—(a) the receipt of certain social security benefits, as specified by that scheme, and(b) the receipt of a formal offer to start work.47. Any payment made by a housing association or local authority in England, from funding granted by the Department for Work and Pensions under section 2 of the Employment Act, to a person residing in social housing, as an incentive to enter employment.

1. Description of payment	2. Conditions that must be satisfied
1. Any payment in respect of any expenses incurred by a claimant who is engaged by a charitable or voluntary organisation or is a volunteer.	The claimant does not receive remuneration or profit from the engagement and is not treated as possessing any employment income under regulation 17 in respect of that engagement.
2. A payment by way of—(a) travelling expenses reimbursed to the claimant;(b) a living away from home allowance under section 2(2)(d) of the Employment Act , section 2(4)(c) of the Enterprise and New Towns (Scotland) Act 1990 or section 1 of the Employment and Training Act (Northern Ireland) 1950 ;(c) training grant; ...(d) child care expenses reimbursed to the claimant in respect of his participation in—(i) a New Deal option,(ii) the Intensive Activity Period of the New Deal Pilots for 25 plus, ...(iii) the Preparation for Employment Programme ; ... (iv) the Flexible New Deal specified in regulation 75(1)(a)(v) of the JSA Regulations ; or (v) the Community Task Force specified in regulation 75(1)(a)(ii)(dd) of the JSA Regulations; or (e) child care expenses under the Steps to Work Programme specified in regulation 75(1)(a)(vi) of the JSA (NI) Regulations.	The claimant—(a)participates in arrangements for training made under—(i)section 2 of the Employment Act;(ii)section 2 of the Enterprise and New Towns (Scotland) Act 1990; or(iii)section 1 of the Employment and Training Act (Northern Ireland) 1950; or(b)attends a course at an employment rehabilitation centre established under section 2 of the Employment Act. The payment is not taxable as a profit of a trade, profession or vocation.
Type of payment to be disregarded	Limit on, or exception to, the extent of disregard
---	---
1. Any discretionary payment made pursuant to section 2 of the Employment Act, or, in Northern Ireland section 1(1) of the Employment and Training Act (Northern Ireland) 1950 to meet, or help meet, the claimant’s special needs in undertaking a qualifying course within the meaning of regulation 17A(7) of the JSA Regulations or regulation 17A(7) of the JSA (NI) Regulations.	A payment is not within this item to the extent that it relates to travel expenses incurred as a result of the claimant’s attendance on the course if an amount in respect of those expenses has already been disregarded pursuant to regulation 8.
2. Any payment made in respect of a career development loan paid pursuant to section 2 of the Employment Act.	A payment is not within this item to the extent that the loan has been applied for or paid in respect of living expenses for the period of education and training supported by the loan.
3. Any payment made to the claimant or his partner in respect of a person who is not normally a member of the claimant’s household but is temporarily in his care, by—(a) a health authority;(b) a local authority;(c) a voluntary organisation;(d) that person pursuant to section 26(3A) of the National Assistance Act 1948 ;(dza) that person where the payment is for the provision of accommodation in respect of the meeting of that person’s needs under section 18 or 19 of the Care Act 2014 (duty and power to meet needs for care and support) or section 35 or 36 of the Social Services and Well-being (Wales) Act 2014 (duty and power to meet care and support needs of an adult); (da) an integrated care board established under Chapter A3 of Part 2 of the National Health Service Act 2006 ;(db) NHS England....	A payment is only to be disregarded by virtue of this item if— (a) any profits ... arising from the payment mentioned in column 1 are treated as nil by section 791 to 794 of ITTOIA (full rent-a-room relief) ; or(b) excluded from profits by section 795 to 798 of ITTOIA (alternative calculation of profits if amount exceeds limit).
4. Any payment made in Northern Ireland to the claimant or his partner in respect of a person who is not normally a member of the claimant’s household but is temporarily in his care—(a) pursuant to Article 36(7) of the Health and Personal Social Services (Northern Ireland) Order 1972 by an authority; a voluntary organisation; or the person concerned, or(b) by a training school within the meaning of section 137 of the Children and Young Persons Act (Northern Ireland) 1968 .In this item “an authority” has the meaning given by Article 2 of the Children (Northern Ireland) Order 1995.	A payment is only to be disregarded by virtue of this item if— (a) any profits ... arising from the payment mentioned in column 1 are treated as nil by section 791 to 794 of ITTOIA (full rent-a-room relief) ; or(b) excluded from profits by section 795 to 798 of ITTOIA (alternative calculation of profits if amount exceeds limit).
5. Any payment under an insurance policy taken out to insure against the risk of being unable to maintain the repayments—(a) on a loan which is secured on the dwelling house which the claimant occupies as his home; or(b) under a regulated agreement or under a hire-purchase agreement or a conditional sale agreement.For the purposes of paragraph (b)—“regulated agreement” has the meaning given in the Consumer Credit Act 1974 ; and“hire-purchase agreement” and “conditional sale agreement” have the meanings given in Part 3 of the Hire-Purchase Act 1964 .	A payment is only to be disregarded by virtue of this item to the extent that it is used to—(a) maintain the repayments referred to in column (1); and(b) meet any amount due by way of premiums on—(i) that policy; or(ii) in a case to which paragraph (a) of this item applies, an insurance policy taken out to insure against loss or damage to any building or part of a building which is occupied by the claimant as his home and which is required as a condition of the loan referred to in column (1).
6. Any payment in respect of the claimant’s attendance at court as a juror or witness.	This item applies only to the extent that the payment is not compensation for loss of earnings or for the loss of payment of social security income.
7. Any payment of a sports award except to the extent that it has been made in respect of living expenses.	For the purposes of this item “living expenses” does not include—(a)the cost of vitamins, minerals or other special dietary supplements intended to enhance the performance of the claimant in the sport in respect of which the award was made; or(b)accommodation costs incurred as a consequence of living away from home whilst training for, or competing in, the sport in respect of which the award was made.

Signed

Jim Fitzpatrick — John Heppell — Two of the Lords Commissioners of Her Majesty’s Treasury — 2002-07-30

Explanatory note

(This note is not part of the Regulations)

Footnotes

2

• (1) In these Regulations, unless the context otherwise requires—

• “the Act” means the Tax Credits Act 2002;

• “the Contributions and Benefits Act” means the Social Security Contributions and Benefits Act 1992 ; ...

• “the Employment Act” means the Employment and Training Act 1973 ; and

• “the Northern Ireland Contributions and Benefits Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

• (2) In these Regulations except where the context otherwise requires—

• “the 1992 Fund” means moneys made available from time to time by the Secretary of State for Social Security for the benefit of persons eligible for payment in accordance with the provisions of a scheme established by him on 24th April 1992 as respects England and Wales and Northern Ireland and on 10th April 1992 as respects Scotland;

• “the Board” means the Commissioners for Her Majesty’s Revenue and Customs;

• “child” has the meaning given in the Child Tax Credit Regulations 2002 ;

• “claim” means a claim for child tax credit or working tax credit and “joint claim” and “single claim” shall be construed in accordance with section 3(8) of the Act and “claimant” shall be construed accordingly;

• “coronavirus” means severe acute respiratory syndrome coronavirus 2;

• “coronavirus support scheme” means—any scheme in relation to which HMRC have functions by virtue of a direction made under section 76 of the Coronavirus Act 2020 (HMRC functions);the scheme known as the Small Business Grant Fund established in response to coronavirus;any scheme established in the tax year 2020-2021 in response to coronavirus to support the fishing industry;the scheme known as the Retail, Hospitality and Leisure Grant Fund established in response to coronavirus;the scheme known as the Newly Self-Employed Hardship Fund established by the Scottish Ministers in the tax year 2020-2021 in response to coronavirus;” andany other support scheme established in the tax year 2020-2021 or 2021-2022 in response to coronavirus;

• “couple” has the meaning given by section 3(5A) of the Act;

• “earnings” shall be construed in accordance with section 62 of the ITEPA;

• “the Eileen Trust” means the charitable trust of that name established on 29th March 1993 out of funds provided by the Secretary of State for Social Security for the benefit of persons eligible in accordance with its provisions;

• ...

• “employment zone” means an area within Great Britain—subject to a designation for the purposes of the Employment Zones Regulations 2003 by the Secretary of State, or listed in the Schedule to the Employment Zones (Allocation to Contractors) Pilot Regulations 2006, pursuant to section 60 of the Welfare Reform and Pensions Act 1999;

• “employment zone programme” means a programme which is—established for one or more employment zones, anddesigned to assist claimants for a jobseeker’s allowance to obtain sustainable employment;

• “family” means—in the case of a joint claim, the ... couple by whom the claim is made and any child or qualifying young person for whom at least one of them is responsible, in accordance with regulation 3 of the Child Tax Credit Regulations 2002 ; andin the case of a single claim, the claimant and any child or qualifying young person for whom he is responsible in accordance with regulation 3 of the Child Tax Credit Regulations 2002;

• “the Independent Living Fund” means the charitable trust of that name established out of funds provided by the Secretary of State for Social Services for the purpose of providing financial assistance to those persons incapacitated by or otherwise suffering from very severe disablement who are in need of such assistance to enable them to live independently;

• “the Independent Living Fund (2006)” means the Trust of that name established by a deed dated 10th April 2006 and made between the Secretary of State for Work and Pensions of the one part and Margaret Rosemary Cooper, Michael Beresford Boyall and Marie Theresa Martin of the other part;

• “the Independent Living Funds” means the Independent Living Fund, the Independent Living (Extension) Fund, the Independent Living (1993) Fund and the Independent Living Fund (2006);

• “the Independent Living (Extension) Fund” means the trust of that name established on 25th February 1993 by the Secretary of State for Social Security and Robin Glover Wendt and John Fletcher Shepherd;

• “the Independent Living (1993) Fund” means the trust of that name established on 25th February 1993 by the Secretary of State for Social Security and Robin Glover Wendt and John Fletcher Shepherd;

• “ITA” means the Income Tax Act 2007;

• “ITEPA” means the Income Tax (Earnings and Pensions) Act 2003;

• “ITTOIA” means the Income Tax (Trading and Other Income) Act 2005;

• “the Macfarlane (Special Payments) Trust” means the trust of that name established on 29th January 1990 partly out of funds provided by the Secretary of State for Health for the benefit of certain persons suffering from haemophilia;

• “the Macfarlane (Special Payments) (No. 2) Trust” means the trust of that name established on 3rd May 1991 partly out of funds provided by the Secretary of State for Health for the benefit of certain persons suffering from haemophilia and other beneficiaries;

• “the Macfarlane Trust” means the charitable trust established partly out of funds provided by the Secretary of State for Health to the Haemophilia Society for the relief of poverty or distress among those suffering from haemophilia;

• “the Macfarlane Trusts” means the Macfarlane Trust, the Macfarlane (Special Payments) Trust and the Macfarlane (Special Payments) (No. 2) Trust;

• “pensionable age” has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995 ;

• “pension fund holder”, in relation to a registered pension scheme, means the trustees, managers or scheme administrators of the scheme ...;

• ...

• “qualifying care receipts” has the meaning given to that expression by section 805 of the Income Tax (Trading and Other Income) Act 2005;

• “qualifying young person” has the meaning given in the Child Tax Credit Regulations 2002;

• registered pension scheme“ has the meaning given by section 150(2) of the Finance Act 2004;

• “Scottish Ministers” has the meaning given by section 44(2) of the Scotland Act 1998.

• ...

• ...

• ...

• ...

• ...

• ...

• “tax year” means a period beginning with the 6th April in one year and ending with 5th April in the next;

• “the Taxes Act” means the Income and Corporation Taxes Act 1988;

• “voluntary organisation” means a body, other than a public or local authority, the activities of which are carried on otherwise than for profit;

• “war pension” has the meaning given in section 25(4) of the Social Security Act 1989 .

• (3) For the purposes of these Regulations, whether a person is responsible for a child or a qualifying young person is determined in accordance with regulation 3 of the Child Tax Credit Regulations 2002.

• (4) In these Regulations—

• (a) a reference to a claimant’s partner is a reference to a claimant’s spouse or civil partner or a person with whom the claimant lives as a spouse or civil partner; and

• (b) a reference to a claimant’s former partner is a reference to a claimant’s former spouse or civil partner or a person with whom the claimant has lived as a spouse or civil partner; and

• (c) a reference in these Regulations to an Extra Statutory Concession is a reference to that Concession as published by the Inland Revenue on 1st July 2002 .

4

• (1) In these regulations “employment income” means—

• (a) any earnings from an office or employment received in the tax year;

• (b) so much of any payment made to a claimant in that year in respect of expenses as is chargeable to income tax by virtue of section 62 or section 72 of ITEPA;

• (c) the cash equivalent of any non-cash voucher received by the claimant in that year and chargeable to income tax under section 87 of ITEPA;

• (d) the cash equivalent of any credit-token received by the claimant in that year and chargeable to income tax under section 94 of ITEPA;

• (e) the cash equivalent of any cash voucher received by the claimant in that year and chargeable to income tax under section 81 of ITEPA;

• (f) any amount chargeable to tax under Chapter 3 of Part 6 of ITEPA;

• (g) so much of a payment of statutory sick pay, received by the claimant during the year, as is subject to income tax by virtue of section 660 of ITEPA;

• (h) the amount (if any) by which a payment of statutory maternity pay, ordinary statutory paternity pay, additional statutory paternity pay , statutory shared parental pay or adoption pay exceeds £100 per week;

• (i) any amount charged to income tax for that year under section 120 or section 149 of ITEPA;

• (j) any sum to which section 225 of ITEPA applies;

• (k) any amount paid in that year by way of strike pay to the claimant as a member of a trade union.

• (l) any amount charged to income tax for that year under Part 7 of ITEPA.

• (m) any amount paid to a person serving a custodial sentence or remanded in custody awaiting trial or sentence, for work done while serving the sentence or remanded in custody.

For the purposes of this paragraph, references to the receipt of a payment of any description are references to its receipt by or on behalf of the claimant, or in the case of a joint claim of either of the claimants, in any part of the world.

This paragraph is subject to the following qualifications.

• (2) Employment income does not include pension income.

• (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) This paragraph applies if (apart from section 64 of ITEPA) the same benefit would give rise to two amounts (“A” and “B”)—

• (a) “A” being an amount of earnings from a claimant’s employment as defined in section 62 of ITEPA, and

• (b) “B” being an amount to be treated as earnings under any provision of Chapter 10 of Part 3 of ITEPA.

• In such a case, the amount to be taken into account in computing the claimant’s employment income is the greater of A and B, and the lesser amount shall be disregarded.

• (4) In calculating employment income, the payments and benefits listed in Table 1 shall be disregarded.

1. Any payment in respect of qualifying removal expenses, or the provision of any qualifying removal benefit, within the meaning of Chapter 7 of Part 4 of ITEPA.2A. The payment or reimbursement of expenses incurred in the provision of transport to a disabled employee (as defined in section 246(4) of ITEPA) by his employer, if no liability to income tax arises in respect of that payment or reimbursement (as the case may be) by virtue of section 246 of ITEPA.2B. The provision to a disabled employee (as defined in section 246(4) of ITEPA) by his employer of a car, the provision of fuel for the car, or the reimbursement of expenses incurred in connection with the car, if no liability to income tax arises in respect of that provision or reimbursement (as the case may be) by virtue of section 247 of ITEPA.2C. The payment or reimbursement of expenses incurred on transport, if no liability to income tax arises in respect of that payment or reimbursement (as the case may be) by virtue of section 248 of ITEPA.3. Travel facilities provided for the claimant as a member of the naval, military or air forces of the Crown for the purpose of going on, or returning from, leave. 3A. The payment by the Secretary of State for Defence of an operational allowance to a member of Her Majesty’s forces in respect of service in an operational area specified under a Royal Warrant made under section 333 of the Armed Forces Act 2006. 3B. A payment designated by the Secretary of State for Defence as Council Tax Relief and made under a Royal Warrant made under section 333 of the Armed Forces Act 2006 to a member of Her Majesty’s forces. 3C.The payment under a Royal Warrant made under section 333 of the Armed Forces Act 2006, of the Continuity of Education Allowance to or in respect of members of the armed forces of the Crown during their employment under the Crown or after their deaths.4. Payment or reimbursement of expenses in connection with the provision for, or use by, the claimant as a person holding an office or employment of a car parking space at or near his place of work.5. Any benefit or non-cash voucher provided to the claimant, or to any member of his family or household, in respect of which no liability to income tax arises by virtue of Chapter 5 of Part 4 of ITEPA. 6. Any payment of incidental overnight expenses in respect of which no liability to income tax arises by virtue of section 240 of ITEPA. 7. Food, drink and mess allowances for the armed forces and training allowances payable to members of the reserve forces in respect of which no liability to income tax arises by virtue of section 297 or 298 of ITEPA.8. The value of meal vouchers issued to the claimant as an employee, if section 89 of ITEPA applies to the vouchers. 9. Any cash payment received by the claimant as a miner in lieu of free coal, or the provision of the coal itself, in respect of which no liability to income tax arises by virtue of section 306 of ITEPA. 10. An award made to the claimant as a director or employee by way of a testimonial to mark long service, if, or to the extent that, no liability to income tax arises in respect of it by virtue of section 323 of ITEPA. 11. Payment of a daily subsistence allowance in respect of which no liability to income tax arises by virtue of section 304 of ITEPA. 11A. The payment or reimbursement of reasonable expenses incurred by an employee who has a permanent workplace at an offshore installation, on transfer transport, related accommodation and subsistence or local transport, if no liability to income tax arises in respect of that payment or reimbursement (as the case may be) by virtue of section 305 of ITEPA.For the purposes of this item, expressions which are defined in section 305 of ITEPA have the same meaning here as they do there.11B. Payment of an allowance to a person in employment under the Crown in respect of which no liability to income tax arises by virtue of section 299 of ITEPA.11C. The payment or reimbursement to an employee of any sum in connection with work-related training, or individual learning account training (as respectively defined in sections 251 and 256 of ITEPA) if no liability to income tax arises in respect of that payment or reimbursement (as the case may be) by virtue of any provision of Chapter 4 of Part 4 of ITEPA.11D. The provision for an employee of a non-cash voucher or a credit-token, to the extent that liability to income tax does not arise in respect of that voucher or credit-token (as the case may be), under Chapter 4 of Part 3 of ITEPA, by virtue of any provision of Chapter 6 of Part 4 of ITEPA.11E. The provision for an employee of free or subsidised meal vouchers or tokens (within the meaning of section 317(5) of ITEPA), if no liability to income tax arises in respect of that provision by virtue of section 317 of ITEPA. 11F. The provision of one mobile telephone for an employee in respect of which no liability to income tax arises by virtue of section 319 of ITEPA. 12. An award made to the claimant under a Staff Suggestion Scheme, if the conditions specified in sections 321 and 322 of ITEPA are satisfied. 13. Travelling and subsistence allowances paid to or on behalf of the claimant by his employer in respect of which no liability to income tax arises by virtue of section 245 of ITEPA. 14. Any gift consisting of goods, or a voucher or token to obtain goods, in respect of which no liability to income tax arises by virtue of section 270 or 324 of ITEPA. 14A. Any payment or reimbursement of expenses incurred in connection with an employment-related asset transfer (as defined in section 326(2) of ITEPA), if no liability to income tax arises in respect of that payment or reimbursement (as the case may be) by virtue of section 326 of ITEPA.14B. Any payment of expenses incurred by an employee in connection with a taxable car if no liability to income tax arises in respect of the payment by virtue of section 239(2) of ITEPA.14C.The discharge of any liability of an employee in connection with a taxable car if no liability to income tax arises by virtue of section 239(1) of ITEPA.14D.A benefit connected with a taxable car if no liability to income tax arises by virtue of section 239(4) of ITEPA.15. A cash voucher, non-cash voucher or credit-token to the extent that it is used by the recipient for the provision of child care, the costs of which if borne by the recipient would be relevant child care charges within the meaning of regulation 14 of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 .16. A payment made by the Department for Work and Pensions under section 2 of the Employment Act— by way of In-Work Credit , Better Off In-Work Credit, Job Grant or Return to Work Credit, ...under the Employment Retention and Advancement Scheme or the Working Neighbourhoods Pilot under the City Strategy Pathfinder Pilots, by way of an In-Work Emergency Discretion Fund payment pursuant to arrangements made by the Secretary of State, ...by way of an Up-front Childcare Fund payment pursuant to arrangements made by the Secretary of State., or under the Future Capital pilot scheme. 16A. A payment made by the Department for Employment and Learning in Northern Ireland under section 1 of the Employment and Training Act (Northern Ireland) 1950 by way of Return to Work Credit. 16B. Any In-Work Emergency Fund payment made to a person pursuant to arrangements made by the Department of Economic Development under section 1 of the Employment and Training Act (Northern Ireland) 1950. 17.The payment or reimbursement of reasonable additional household expenses incurred by an employee who works from home, within the meaning of section 316A of ITEPA.18.The payment or reimbursement of retraining course expenses within the meaning of section 311 of ITEPA.19. Provision of computer equipment in respect of which no liability to income tax arises by virtue of section 320 of ITEPA. 20. Pay As You Earn (PAYE) settlement agreements made under Part 6 of the Income Tax (PAYE) Regulations (“the PAYE Regulations”) 2003.For the purposes of this item the special arrangements under regulation 141 of the PAYE Regulations also apply.21.The payment or reimbursement of a fee within section 326A(1) of ITEPA (fees relating to vulnerable persons’ monitoring schemes). 22. The payment of a qualifying bonus within section 312A of ITEPA (limited exemption for qualifying bonus payments).

• (5) From the amount of employment income, calculated in accordance with the preceding provisions of this regulation, there shall be deducted the amount of any deduction permitted in calculating earnings by virtue of any provision of sections 231 to 232, 336 to 344, or section 346, 347, 351, 352, 362, 363, 367, 368, 370, 371, 373, 374, 376, 377 or 713 of ITEPA.

For the purposes of this paragraph, references to the receipt of a payment of any description are references to its receipt by or on behalf of the claimant, or in the case of a joint claim of either of the claimants, in any part of the world.

This paragraph is subject to the following qualifications.

• (2) Employment income does not include pension income.

• (3) This paragraph applies in the case of a claimant who is in employment to which Chapter 2 of Part 5 of the Taxes Act applies.

Where this paragraph applies, and the cash equivalent of an emolument chargeable to income tax under section 154 of the Taxes Act, calculated in accordance with subsection (2), (3) or (4) of section 156 of that Act, is greater than the value of the emolument calculated otherwise than in accordance with those provisions (“the lesser value”), the amount produced by them shall be taken into account and the lesser value disregarded.

• (4) In calculating employment income, the payments and benefits listed in Table 1 shall be disregarded.

1.Any payment in respect of qualifying removal expenses, or the provision of any qualifying removal benefit, within the meaning of Schedule 11A to the Taxes Act .2.Payments in respect of expenses which are wholly, exclusively and necessarily incurred in the performance of the duties of the claimant’s employment or which are qualifying travelling expenses within section 198(1A) of the Taxes Act .3.Travel facilities provided for the claimant as a member of the naval, military or air forces of the Crown for the purpose of going on, or returning from, leave.4.Payment or reimbursement of expenses in connection with the provision for, or use by, the claimant as a person holding an office or employment of a car parking space at or near his place of work.5.Any benefit or non-cash voucher provided to the claimant, or to any member of his family or household, falling within section 197G of the Taxes Act (sporting and recreational facilities) .6.Any payment of incidental overnight expenses falling within section 200A of the Taxes Act .7.So much of a gratuity payable to a member of the Armed Forces which is exempt under section 316 of the Taxes Act.8.The value of meal vouchers issued to the claimant as an employee, if the conditions specified in Inland Revenue Extra Statutory Concession A2 are satisfied.9.Any cash payment received by the claimant as a miner in lieu of free coal, or the provision of the coal itself, in relation to which income tax is not charged under Inland Revenue Extra Statutory Concession A6.10.An award made to the claimant as a director or employee by way of a testimonial to mark long service, if the conditions specified in Inland Revenue Extra Statutory Concession A22 are satisfied.11.Payment of a daily subsistence allowance to which Extra Statutory Concession A84 applies.12.An award made to the claimant under a Staff Suggestion Scheme, if the conditions specified in Inland Revenue Extra Statutory Concession A57 are satisfied.13.Travelling and subsistence allowances paid to or on behalf of the claimant by his employer which fall within Inland Revenue Extra Statutory Concession A58 (public transport disruption).14.Any gift consisting of goods, or a voucher or token to obtain goods, if the conditions specified in Inland Revenue Extra Statutory Concession A70 are satisfied.15.A cash voucher, non-cash voucher or credit-token to the extent that it is used by the recipient for the provision of child care, the costs of which if borne by the recipient would be relevant child care charges within the meaning of regulation 14 of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 .

• (5) From the amount of employment income, calculated in accordance with the preceding provisions of this regulation, there shall be deducted the amount of any deduction permitted in calculating emoluments for the purposes of Schedule E by virtue of—

• (a) section 201 of the Taxes Act (deductions for fees and subscriptions to professional bodies and learned societies);

• (b) section 201AA of the Taxes Act (deductions in connection with employee liabilities and indemnity insurance) ;

• (c) section 201A of the Taxes Act (entertainers’ expenses)(; or

• (d) under section 202(2) of the Taxes Act (payroll deduction scheme for payments to charity) .

Here “taxable profits” has the same meaning as it has for Cases I, II and V of Schedule D but disregarding sections 95A and section 96 of the Taxes Act (averaging of fluctuating profits: rules for creative artists, farmers and market gardeners) .

This is subject to the following provisions of this regulation.

• (2) Pensions under the Contributions and Benefits Act which are pension income by virtue of regulation 5(1)(a) are not social security income.

• (3) In calculating the claimant’s social security income the payments in Table 3 shall be disregarded.