Income tax

Income tax

Background

Income tax affects most individuals. It is collected through a number of methods, including Pay As You Earn (PAYE), self assessment and deduction at source. The main pieces of legislation are the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), the Income Tax (Trading and Other Income) Act 2005 and the Income Tax Act 2007 (ITA 2007). For further guidance on the legislation relevant to income tax (including the tax rewrite project), see Practice Note: What is the basis of income tax?

Income tax on the earnings of an employed individual is collected on a monthly or weekly basis, depending on how the individual is paid. The tax collection is administered by an individual’s employer through PAYE under which the employer has an obligation to pay the income tax owed by the individual directly to HM Revenue & Customs (HMRC).If the individual also has income from other sources which are received gross, such as rental income, or net of tax at a rate below the individual’s marginal rate of tax, they must account for the additional income tax through the self assessment

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Private Client News

Private Client weekly highlights—21 November 2024

This week’s edition of Private Client highlights includes: (1) Wigglesworth v Beetson, in which the claimant failed in an action for estoppel and adverse possession; (2) the Hansard Society to host a briefing on parliamentary process for Assisted Dying Bill; (3) Khan v Khan, which considered family property and constructive trusts; (4) analysis of the Autumn Budget announcement to bring unused pension funds and death benefits within the scope of IHT; (5) Palmer v Sans, which found that there was no transaction at an undervalue where property was already held on trust for the transferee; (6) KA v FA (The Secretary of State for the Home Department intervening), where the court recognised an overseas adoption notwithstanding failure of common law test; and (7) Kireeva v Bedzhamov, in which the Supreme Court has confirmed the application of the immovables rule to English property.

HoL committee issues call for evidence on Property (Digital Assets etc) Bill

A Special Public Bill Committee established by the House of Lords has issued a call for evidence on the Property (Digital Assets etc) Bill. The deadline for submissions is Friday 20 December 2024.

Privy Council rules BVI company shares are not immovable property (Al Thani v Al Thani)

Private Client analysis: In a decision which will come as a relief to private individuals who own shares in BVI companies, the Privy Council has decided that section 245 of the BVI’s Business Companies Act 2004 does not have the effect of re-categorising shares as immovable property for the purposes of succession. Written by Kyle Bonnell, pupil at XXIV Old Buildings.

Supreme Court confirms application of immovables rule to English property

The Supreme Court has unanimously dismissed Ms Kireeva’s (Russian bankruptcy trustee’s) appeal to overturn the Court of Appeal’s’ decision regarding matters arising out of the bankruptcy of Mr Bedzhamov. Peter Declercq and Patrick Elliot, partners at DCQ Legal (who acted for Ms Kireeva), discuss the implications of the judgment.