Income Tax (Trading and Other Income) Act 2005 section 53

Social security contributions

Section 53 restricts the deduction of social security contributions when calculating trading profits, while preserving a deduction for employer National Insurance contributions.

• A trader's own National Insurance contributions (such as Class 2 and Class 4) are not deductible when calculating trading profits
• Employer contributions — secondary Class 1, Class 1A and Class 1B — remain fully deductible as a trading expense
• The prohibition covers contributions under both the Social Security Contributions and Benefits Act 1992 and the equivalent Northern Ireland Act 1992
• The same principle applies to property income and employment income through parallel provisions elsewhere in the Act