The Council Tax Reduction (Scotland) Regulations 2012

Contents

Part 1 · General

1Citation and commencement#

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2Interpretation#

(1)^note...• ^note...• “the 1992 Act” means the Social Security Contributions and Benefits Act 1992 ^note;• ^note...• “local authority” in Scotland means a council constituted by section 2 of the Local Government etc. (Scotland) Act 1994 ^note;• ^note...• “self-employed earner” has the meaning given by section 2(1)(b) of the 1992 Act (categories of earners);• ^note...• “voluntary organisation” means a body, other than a public or local authority, the activities of which are carried on otherwise than for profit;• ^note...

(2)

(3)

(4)

(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)

(7)

(8)

(9)Where a person making a surrender under regulation D14—

references in paragraph (8) to the retirement pension are references to the retirement pension which would become payable if he were to cease to hold his employment on the day on which the surrender takes effect.

3Non-dependants#

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4Young persons#

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5Occupation of a dwelling as a home#

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6Remunerative work#

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Part 2 · Families

7Entitlement of only one member of a family#

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8Couples: polygamous marriages#

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9Applicant in receipt of income-related benefit#

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10Responsibility for another person#

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11Membership of a household#

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Part 3 · Application of the Regulations

12Application#

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13Prescribed years#

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Part 4 · Entitlement to council tax reduction

14Conditions of entitlement to council tax reduction#

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14AConditions of entitlement to council tax reduction – dwellings in bands E to H#

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15Persons not entitled to council tax reduction: absentees#

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16Persons not entitled to council tax reduction: persons treated as not being in Great Britain#

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17Persons treated as being in Great Britain#

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18Temporary absence from Great Britain#

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19Persons not entitled to council tax reduction: persons subject to immigration control#

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20Persons not entitled to council tax reduction: students#

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20ANon-recovery of council tax arrears caused by official error#

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Part 5 · Applicable amount

21Applicable amount#

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22Applicable amount: polygamous marriages.#

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22ATransitional family premium#

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23Applicable amount: persons who have an award of universal credit#

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Part 6 · Income and capital

Chapter 1 · General

24Calculation of income and capital of members of applicant's family and of a polygamous marriage#

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25Circumstances in which capital and income of non-dependant is to be treated as applicant's#

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Chapter 2 · Income and capital where there is an award of universal credit

26Calculation of income and capital: persons who have an award of universal credit#

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Chapter 3 · Income

27Calculation of income on a weekly basis#

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28Treatment of child care charges#

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29Average weekly earnings of employed earners#

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30Average weekly earnings of self-employed earners#

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31Average weekly income other than earnings#

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32Calculation of average weekly income from ... tax credits#

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33Calculation of weekly income#

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Chapter 4 · Employed earners

34Earnings of employed earners#

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35Calculation of net earnings of employed earners#

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Chapter 5 · Self-employed earners

36Earnings of self-employed earners#

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37Calculation of net profit of self-employed earners#

(1)For the purposes of regulation 30 (average weekly earnings of self-employed earners) the earnings of an applicant to be taken into account are—

(a)in the case of a self-employed earner who is engaged in employment on that earner's own account, the net profit derived from that employment;

(b)in the case of a self-employed earner whose employment is carried on in partnership or is that of a share fisherman within the meaning of the Social Security (Mariners' Benefits) Regulations 1975 ^note, that earner's share of the net profit derived from that employment, less—

(i)an amount in respect of income tax and social security contributions payable under the 1992 Act calculated in accordance with regulation 38 (deduction of tax and contributions for self-employed earners); and

(ii)one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.

(2)Any sum, where applicable, specified in Schedule 3 is to be disregarded when calculating a self-employed earner's net profit.

(3)For the purposes of paragraph (1)(a) the net profit of the employment is, except where paragraph (9) applies, to be calculated by taking into account the earnings of the employment over the assessment period less—

(a)subject to paragraphs (5) to (8), any expenses wholly and exclusively incurred in that period for the purposes of that employment;

(b)an amount in respect of—

(i)income tax; and

(ii)social security contributions payable under the 1992 Act; and

(c)one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.

(4)For the purposes of paragraph (1)(b) the net profit of the employment is to be calculated by taking into account the earnings of the employment over the assessment period less, subject to paragraphs (5) to (8), any expenses wholly and exclusively incurred in that period for the purposes of the employment.

(5)Subject to paragraph (6), no deduction is to be made under paragraph (3)(a) or (4), in respect of—

(a)any capital expenditure;

(b)the depreciation of any capital asset;

(c)any sum employed or intended to be employed in the setting up or expansion of the employment;

(d)any loss incurred before the beginning of the assessment period;

(e)the repayment of capital on any loan taken out for the purposes of the employment;

(f)any expenses incurred in providing business entertainment; or

(g)any debts, except bad debts proved to be bad, but this sub-paragraph does not apply to any expenses incurred in the recovery of a debt.

(6)A deduction is to be made under paragraph (3)(a) or (4) in respect of the repayment of capital on any loan used for—

(a)the replacement in the course of business of equipment or machinery; and

(b)the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair.

(7)The relevant authority is to refuse to make a deduction in respect of any expenses under paragraph (3)(a) or (4) where it is not satisfied given the nature and the amount of the expense that it has been reasonably incurred.

(8)For the avoidance of doubt—

(a)a deduction is not to be made under paragraph (3)(a) or (4) in respect of any sum unless it has been expended for the purposes of the employment;

(b)a deduction is to be made under paragraph (3)(a) or (4) in respect of—

(i)the excess of any value added tax paid over value added tax received in the assessment period;

(ii)any income expended in the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair; and

(iii)any payment of interest on a loan taken out for the purposes of the employment.

(9)Where an applicant is engaged in employment as a child minder the net profit of the employment is to be one-third of the earnings of that employment, less—

(a)an amount in respect of—

(i)income tax; and

(ii)social security contributions payable under the 1992 Act;

calculated in accordance with regulation 38 (deduction of tax and contributions of self-employed earners); and

(b)one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.

(10)For the avoidance of doubt where an applicant is engaged in employment as a self-employed earner and is also engaged in one or more other employments as a self-employed or employed earner any loss incurred in any one of those employments is not to be offset against earnings in any other of the applicant's employments.

(11)The amount in respect of any qualifying premium is to be calculated by multiplying the daily amount of the qualifying premium by the number equal to the number of days in the assessment period, and for the purposes of this regulation the daily amount of the qualifying premium is to be determined—

(a)where the qualifying premium is payable monthly, by multiplying the amount of the qualifying premium by 12 and dividing the product by 365; and

(b)in any other case, by dividing the amount of the qualifying premium by the number equal to the number of days in the period to which the qualifying premium relates.

(12)In this regulation “qualifying premium” means any premium which is payable periodically in respect of a personal pension scheme and is payable on or after the date of the application.

38Deduction of tax and contributions of self-employed earners#

(1)The amount to be deducted in respect of income tax under regulation 37(1)(b)(i), (3)(b)(i) or (9)(a)(i) (calculation of net profit of self-employed earners) is to be calculated on the basis of the amount of chargeable income and as if that income was assessable to income tax at the basic rate of tax applicable to the assessment period less only the personal relief to which the applicant is entitled under section 35(1) of the Income Tax Act 2007 (personal allowance for those aged under 65) as is appropriate to the applicant's circumstances, but, if the assessment period is less than one year the earnings to which the basic rate of tax is to be applied and the amount of the personal reliefs deductible under this paragraph are to be calculated on a pro rata basis.

(2)The amount to be deducted in respect of social security contributions under regulation 37(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) is the total of—

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the amount of Class 4 contributions (if any) which would be payable under section 15 of the 1992 Act ^note (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable to the assessment period on so much of the chargeable income as exceeds the lower limit but does not exceed the upper limit of profits and gains applicable for the tax year applicable to the assessment period, but if the assessment period is less than one year those limits are to be reduced pro rata.

(3)In this regulation “chargeable income” means—

(a)except where sub-paragraph (b) applies, the earnings derived from the employment less any expenses deducted under regulation 37(3)(a) or, as the case may be, (4); and

(b)in the case of employment as a child minder, one-third of the earnings of that employment.

Chapter 6 · Other income

39Calculation of income other than earnings#

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40Capital treated as income#

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41Notional income#

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Chapter 7 · Capital

42Capital limit#

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43Calculation of capital#

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44Disregard of capital of child and young person#

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45Income treated as capital#

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46Calculation of capital in the United Kingdom#

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47Calculation of capital outside the United Kingdom#

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48Notional capital#

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49Diminishing notional capital#

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50Capital jointly held#

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51Calculation of tariff income from capital#

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Part 7 · Students

Chapter 1 · General

52Interpretation: students#

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53Treatment of students#

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Chapter 2 · Income

54Calculation of grant income#

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55Calculation of covenant income where a contribution is assessed#

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56Covenant income where no grant income or no contribution is assessed#

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57Relationship with amounts to be disregarded under Schedule 4#

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58Other amounts to be disregarded#

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59Treatment of student loans#

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60Treatment of fee loans#

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61Treatment of payments from access funds#

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62Disregard of contribution#

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63Further disregard of student's income#

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64Income treated as capital#

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65Disregard of changes occurring during summer vacation#

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Part 8 · Amount of reduction

66Maximum council tax reduction#

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67Non-dependant deductions#

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68Extended council tax reduction#

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69Duration of period of entitlement to extended council tax reduction#

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70Amount of extended council tax reduction#

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71Extended council tax reduction: movers#

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72Relationship between council tax reduction and extended council tax reduction#

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73Extended council tax reduction (qualifying contributory benefits)#

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74Duration of extended council tax reduction (qualifying contributory benefits)#

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75Amount of extended council tax reduction (qualifying contributory benefits)#

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76Extended council tax reduction (qualifying contributory benefits): movers#

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77Relationship between council tax reduction and extended council tax reduction (qualifying contributory benefits)#

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78Alternative maximum council tax reduction#

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79Residents of a dwelling to whom regulation 14(6) does not apply#

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Part 9 · Effective date

80Date on which entitlement is to begin#

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81Date on which a change of circumstances is to take effect#

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Part 10 · Applications

82Who may apply#

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83Written applications#

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84Telephone applications#

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85Date on which an application is made#

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86Evidence and information#

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87Amendment of applications#

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88Withdrawal of applications#

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Part 11 · Notification of changes of circumstances

89Duty to notify changes of circumstances#

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90Alternative means of notifying changes of circumstances#

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Part 11A · Reviews

90AReview of determination on an application#

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90BRequest for further review#

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90CPanel to conduct further reviews#

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90DConduct of further reviews#

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Part 12 · Electronic communications

91Sending documents by electronic communication#

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Part 13 · Consequential and transitional provisions

92Transitional provision#

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93Savings provision#

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94Consequential amendments#

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Schedule 1 · Applicable amount

Part 1 · Personal Allowances

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 2 · Family Premium

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (repealed)

Part 3 · Disability premiums

(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(16). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 4 · Amounts of disability premiums

(17). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 5 · Components

(18). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(19). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(20). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(21). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(22). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(23). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(24). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 6 · Transitional addition

(25). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(26). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(27). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(28). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(29). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(30). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 2 · Amount of alternative maximum council tax reduction

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 3 · Sums to be disregarded in the calculation of earnings