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13. Income tax (charge and rates for 1994-95)
Resolved,
That
(1) income tax shall be charged for the year 1994-95, and for that year--
(a) the lower rate shall be 20 per cent.,
(b) the basic rate shall be 25 per cent., and
(c) the higher rate shall be 40 per cent.
(2) For the year 1994-95 section 1(2) of the Income and Corporation Taxes Act 1988 shall apply as if--
(a) the amount specified in paragraph (aa) were £3,000, and (
(b) the amount specified in paragraph (b) were £23,700; and accordingly section 1(4) of that Act shall not apply for the year 1994-95.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
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14. Income tax (personal allowance)
Resolved,
That section 257 of the Income and Corporation Taxes Act 1988 shall apply for the year 1994-95 as if the amounts specified in it were the same as the amounts specified in it as it applies for the year 1993-94, and accordingly section 257C(1) of that Act so far as relating to section 257 shall not apply for the year 1994-95. And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
15. Married couple's allowance etc.
Resolved,
That the Income and Corporation Taxes Act 1988 shall have effect as follows.
(1) The provisions of section 256 of that Act shall become subsection (1) of that section and after that subsection there shall be inserted the following subsections--
"(2) Where under any provision of this Chapter the relief to which a person is entitled for any year of assessment consists in an income tax reduction calculated by reference to a specified amount, the effect of that relief shall be that the amount of that person's liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from that provision less whichever is the smaller of--
(a) the amount equal to 20 per cent. of the specified amount; and (
(b) the amount which reduces his liability to nil.
(3) In determining for the purposes of subsection (2) above the amount of income tax to which a person would be liable apart from any provision providing for an income tax reduction, no account shall be taken--
(a) where that provision is section 259 or 261A, of any income tax reduction under any of the other provisions of this Chapter; (
(b) where that provision is section 262(1), of any income tax reduction under any of the other provisions of this Chapter except section 259 or 261A; or
(c) whatever that provision--
(i) of any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or (
(ii) of any tax at the basic rate on so much of that person's income as is income the income tax on which he is entitled to charge againt any other person or to deduct, retain or satisfy out of any payment;
but paragraph (a) above, so far as it relates to any income tax reduction under section 261A, is without prejudice to the provisions of subsection (2) of that section."
(2) In section 257A of that Act--
(a) in subsection (1), for the words from "to a deduction" onwards there shall be substituted "for that year to an income tax deduction calculated by reference to £1,720";
(b) in subsection (2), for the words from "to a deduction" to "the deduction" there shall be substituted "for that year to an income tax reduction calculated by reference to £2,665 (instead of to the reduction";
(c) in subsection (3), for the words from "to a deduction" to "the deduction" there shall be substituted "for that year to an ted "income tax reduction".
(3) In subsections (1) and (2) of section 257BA of that Act (
(a) for the words "to deduct from her total income", in each place where they occur, there shall be substituted "to an income tax reduction calculated by reference to"; and
(b) for the words "that he is entitled to deduct under section 257A", in each place where they occur, there shall be
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substituted "by reference to which the calculation of the income tax reduction to which he is entitled under section 257A is to be made".(4) In subsection (3) of section 257BA of that Act--
(a) for "to deduct from his total income" there shall be substituted "to an income tax reduction calculated by reference to"; (
(b) for "the amount, if any, that he is already entitled to deduct" there shall be substituted "any income tax reduction to which he is already entitled"; and
(c) for "that she is entitled to deduct by virtue of that election" there shall be substituted "by reference to which the calculation of the income tax reduction to which she is entitled by virtue of that election is to be made".
(5) Any election made for the purposes of section 257BA of that Act before 6th April 1994 which, apart from this Resolution, would have effect in accordance with that section for the year 1994-95 shall so have effect as if it were an election for the purposes of that section as amended by this Resolution.
(6) In subsection (1) of section 257BB of that Act, for paragraph (b) and the words after that paragraph there shall be substituted-- "(b
(the amount of the reduction to which he is entitled is determined in accordance with section 256(2)(b) or, by virtue of his having no income tax liability to which that reduction is applicable, is nil,)
his wife shall be entitled (in addition to any reduction to which she is entitled by virtue of an election under section 257BA) to an income tax reduction calculated by reference to an amount equal to the unused part of the amount by reference to which her husband's income tax reduction fell to be calculated in pursuance of section 257A and any election under section 257BA."
(7) In subsection (3) of section 257BB of that Act, for paragraph (b) and the words after that paragraph there shall be substituted-- "(b
the amount of the reduction to which she is entitled is determined in accordance with section 256(2)(b) or, by virtue of her having no income tax liability to which that reduction is applicable, is nil, (
her husband shall be entitled (in addition to any other reduction to which he is entitled by virtue of section 257A) to an income tax reduction calculated by reference to an amount equal to the unused part of the amount by reference to which his wife's income tax reduction fell to be calculated in pursuance of that election." ; and after that subsection there shall be inserted the following subsection--
"(3A) In this section references, in relation to such an amount as is mentioned in subsection (1)(b) or (3)(b), to the unused part of an amount by reference to which any income tax reduction fell to be calculated are references to so much of it (including, where the amount so mentioned is nil, all of it) as has no practical effect on the determination of the amount so mentioned."
(8) Subsection (6) of section 257BB of that Act shall cease to have effect.
(9) Where the year in question for the purposes of subsection (5) of section 257D of that Act is the year 1994-95, deductions by virtue of any of sections 257A to 262 of that Act shall be disregarded in determining the deductions which a wife is taken for the purposes of paragraph (c) of that subsection to have been entitled to make from her total income for the year immediately preceding the year in question.
(10) In section 257D(5)(d) of that Act, the words "section 257A and" shall be omitted.
(11) In section 257F(c) of that Act, after "257A" there shall be inserted "or, as the case may be, an income tax reduction under that section".
(12) In subsection (1)(b) of section 259 of that Act, for "to a deduction from his total income" there shall be substituted "to an income tax reduction".
(13) In section 259(2) of that Act, for "to a deduction from his total income of" there shall be substituted "for that year to an income tax reduction calculated by reference to".
(14) In subsection (3) of section 259 of that Act, for "deduction" there shall be substituted "income tax reduction".
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(15) In subsection (4A) of section 259 of that Act--(a) for the words "a deduction", in the first and third places where they occur, there shall be substituted "an income tax reduction" ; and
(b) for the words "a deduction", in the second place where they occur, there shall be substituted "a reduction".
(16) In subsection (1)(b) of section 260 of that Act, for the words from "the deduction" to "equal" there shall be substituted "the income tax reduction to which each of them is entitled under that section shall be calculated, subject to subsection (2) below, by reference".
(17) In subsection (2) of section 260 of that Act, for the words from "the deduction" to "equal" there shall be substituted "the income tax reduction to which he is entitled for that year under section 259 shall be calculated by reference".
(18) In section 261A(1) of that Act, for "to a deduction from his total income of " there shall be substituted "for that year to an income tax reduction calculated by reference to".
(19) In subsection (1) of section 262 of that Act--
(a) in paragraph (a), for "to a deduction from her total income of " there shall be substituted "to an income tax reduction calculated by reference to" ; and
(b) in paragraph (b), for "to a deduction of " there shall be substituted "to an income tax reduction calculated by reference to". (20) In section 265(3)(b) of that Act, the words from "section 257A" to "or under" shall be omitted.
(21) In section 276 of that Act, after subsection (1) there shall be inserted the following subsection--
"(1A) In subsection (1) above the references to relief under this Chapter do not include references to relief consisting in such an income tax reduction as is mentioned in section 256(2) above." (22) This Resolution shall apply for the year 1994-95 ; and section 257C(1) of that Act, so far as relating to section 257A(1) to (3) of that Act, shall not apply for the year 1994-95.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968. 16. Amount by reference to which MCA is reduced--
Resolved,
That section 257A(5) of the Income and Corporation Taxes Act 1988 shall apply for the year 1994-95 as if the amount specified in it were the same as the amount specified in it as it applies for the year 1993-94, and accordingly section 257C(1) of that Act so far as relating to section 257A(5) shall not apply for the year 1994-95. And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968. 17. Relief for maintenance payments etc.--
Resolved,
That sections 347A and 347B of the Income and Corporation Taxes Act 1988 and section 38 of the Finance Act 1988 shall have effect in relation to payments becoming due on or after 6th April 1994 with the following modifications.
(1) Section 347A shall apply to any payment made--
(a) in pursuance of any obligation which falls within paragraphs (a) to (c) of subsection (4) of section 36 of the Finance Act 1988 and is an obligation under an order made by a court, a written or oral agreement or a deed executed for giving effect to an agreement, and
(b) for the benefit, maintenance or education of a person (whether or not the person to whom the payment is made) who attained the age of 21 on or before the day on which the payment became due after 5th April 1994,
as if that obligation were not an existing obligation within the definition contained in that subsection.
(2) In subsection (2) of section 347B--
(a) the words "Notwithstanding section 347A(1)(a) but" shall be omitted; and
(b) for the words from "in computing" to "to deduct" there shall be substituted "for a year of assessment to an income tax reduction calculated by reference to".
(3) In subsection (3) of section 347B, for the words from the beginning to "exceed" there shall be substituted "The amount by reference to which any income tax reduction is to be calculated under this section shall be limited to".
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(4) In subsection (5) of section 347B, for "otherwise than under this section" there shall be substituted "by virtue of section 36(3) of the Finance Act 1988 but otherwise than in accordance with section 38(2)(a) of that Act".(5) After subsection (5) of Section 347B there shall be inserted the following subsections--
"(5A) Where any person is entitled under this section for any year of assessment to an income tax reduction calculated by reference to the amount determined in accordance with subsections (2) to (5) above ( the relevant amount'), the amount of that person's liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from this section less whichever is the smaller of--
(a) the amount equal to the appropriate percentage of the relevant amount ; and
(b) the amount which reduces his liability to nil ;
and in this subsection the appropriate percentage' means 20 per cent.
(5B) In determining for the purposes of subsection (5A) above the amount of income tax to which a person would be liable apart from any income tax reduction under this section, no account shall be taken of--
(a) any income tax reduction under Chapter I of Part VII ; (
(b) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1) ; or (
(c) any tax at the basic rate on so much of that person's income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment."
(6) In subsection (3) of section 38, for the words from the word "aggregate", in the first place where it occurs, to "exceed" there shall be substituted "amount (if any) by which the relevant aggregate exceeds the amount specified in section 257A(1) of the Taxes Act 1988 for the year ; and in this subsection and subsection (3A) below the relevant aggregate' means whichever is the smaller of the following, that is to say, the aggregate amount of the payments made by him which fall due in that year and to which this section applies and". (7) After subsection (3) of section 38 there shall be inserted the following subsection--
"(3A) Sections 347A and 347B of the Taxes Act 1988 (except, in the case of section 347A, so far as it restricts the extent to which any payment is to be treated as forming part of the income of the person to whom it is made or any other person) shall have effect as if so much of the relevant aggregate for any year of assessment as does not exceed the amount specified for that year in section 257A(1) of that Act were a qualifying maintenance payment made otherwise than in pursuance of an existing obligation."
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
18. Relief for blind persons
Resolved,
That--
(1) In section 265(1) of the Income and Corporation Taxes Act 1988 for "£1,080" there shall be substituted "£1,200".
(2) This Resolution shall apply for the year 1994-95
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
19. Relief for interest (limit for 1994-95)
Resolved,
That, for the year 1994-95, the qualifying maximum defined in section 367(5) of the Income and Corporation Taxes Act 1988 shall be £30,000.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
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20. Relief for interest (new basis)--Resolved,
That--
(1) For subsection (1) of section 353 of the Income and Corporation Taxes Act 1988 there shall be substituted the following subsection-- "(1) Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to sections 354 to 368) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of sections 354 to 365."
(2) After that subsection there shall be inserted the following subsections --
"(1A) Where a person is entitled for any year of assessment to relief under this section in respect of any amount of interest which--
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