Reply To: non dep income – self employed

Kevin D

Found a summary relating to [b:39ac9d0259]HOGG[/b:39ac9d0259] on Google (see below). However, in [b:39ac9d0259]CIS/3066/1998[/b:39ac9d0259] ( ) the [b:39ac9d0259]Hogg[/b:39ac9d0259] approach was [u:39ac9d0259]NOT[/u:39ac9d0259] accepted….

[Edit]: Found Hogg on Rightsnet:

Trouble is, the context of both cases is very different to the self-employed non-dep income in HB/CTB cases. My strictly personal view is that expenses should be allowed. But, without absolutely definitive case law / CDs in circumstances that closely reflect the HB/CTB non-dep regulations, I’d readily accept my view may turn out to be wrong. On the other hand, as the DWP guidance suggests expenses should NOT be allowed, there’s probably a good chance the expenses SHOULD in fact be allowed…. 😈

The extract about Hogg is below:
A Church of England clergyman was paid a monthly stipend divided into two elements: taxable and non-taxable allowances for heating, lighting, cleaning and garden maintenance. It was claimed that, in assessing his family’s gross income forFIS , other expenses which he necessarily incurred should be allowed, e.g. travelling, maintenance of robes and secretarial services, all of which had in fact been allowed by the Inland Revenue.

The Commissioner held that payment to cover exclusively expenses incurred in the course of performing the duties of his office or employment did not enter into the computation of normal gross income either under r.2(3) or 2(4) of the General Regs 1980 and ought not be taken into account at all (para 9); payments which were expressed to be for expenses that went beyond reimbursement of expenses incurred in connection with the duties of the employee constituted part of a person’s earnings, subject only to such deductions (if any) as were allowable under FIS law(para 9); in the first limb of r.2(3) the word ‘thereof’ related to ‘a person’s earnings’, not to ‘salary, wages or fees’ (para 11); [b:39ac9d0259]in that regulation ‘gross’ meant before the deduction of tax, but after deduction of expenses which were allowable in arriving at the taxable sum;[/b:39ac9d0259] expenses did not include those payments which were in reality ways of spending income which happened to be allowed as deduction for income tax purposes (such as mortgage interest), but only money which had to be expended to make the earnings (para 12); the claimant’s right to occupy his house rent free did notfall to be included in the family’s resources (para 13); the appeal was accordinglyallowed (para 1). (Decision upheld by Court of Appeal, sub nom. [b:39ac9d0259]The Chief Adjudication Officer v. Hogg [1985] 1 WLR 1100, R(FIS) 4/85[/b:39ac9d0259], Appendix).