Schedule 1: Consequential Amendments Income Tax (Earnings and Pensions) Act 2003 Paragraph 594: section 360A of ITEPA
3508.This new section of ITEPA rewrites part of the rule in section 617(3) and (4) of ICTA, which prohibits the deduction of most social security contributions in calculating income for tax purposes. The remainder of the rule is rewritten, for income tax, in section 868 (social security contributions) of this Act.
3509.In some circumstances an employee may be allowed a deduction for wages paid. In that case, the associated employer’s national insurance contributions may also be allowed. The deduction is allowed if it would meet the tests in section 336 of ITEPA (see section 617(4)(d) of ICTA). But it should also be allowed if it meets the tests in any of sections 337 to 342 of ITEPA. See Change 153 in Annex 1.