(3) The amount of the donations is allowed as a deduction in calculating the
amount of the individual’s income which is charged to tax in accordance with
(4) In the case of a payment of, or on account of—
(a) taxable earnings from an employment, the deduction is allowed from
the taxable earnings from the employment in calculating the net taxable
earnings from the employment for the relevant tax year for the
purposes of Part 2 (see section 11(1));
(b) taxable specific income from an employment, the deduction is allowed
from that taxable specific income in calculating the net taxable specific
income from the employment for the relevant tax year for the purposes
of Part 2 (see section 12(1));
(c) taxable pension income for a pension, annuity or other item of pension
income, the deduction is allowed from that taxable pension income in
calculating the net taxable pension income for that income for the
relevant tax year for the purposes of Part 9 (see section 567(3));
(d) taxable social security income for a taxable benefit, the deduction is
allowed from that taxable social security income in calculating the net
taxable social security income for that benefit for the relevant tax year
for the purposes of Part 10 (see section 658(3)).
(5) For the purposes of subsection (4) “relevant tax year” means—
(a) in the case of paragraphs (a) and (b), the tax year in which the donation
is withheld, and
(b) in the case of paragraphs (c) and (d), the tax year for which the income
referred to in subsection (1)(a) is taxable pension income or taxable
social security income, as the case may be.
714 Meaning of “donations”
(1) For the purposes of this Part “donations” means sums which—
(a) are withheld by the payer under a scheme which is an approved
scheme at the time of the withholding,
(b) constitute gifts by the individual to one or more specified charities
under the scheme, and
(c) satisfy the conditions (if any) set out in the scheme.
(2) In this section—
“approved scheme” means a scheme which is approved (or is of a kind
approved) by the Inland Revenue and under which—
(a) the payer is required to pay sums withheld to a body which is
an approved agent at the time of the withholding, and
(b) the approved agent is required—
(i) to pay sums withheld to the specified charity or charities,
(ii) in a case where the agent is itself a specified charity, to
retain any sum due to itself;
“charity” means any body of persons or trust established for charitable
purposes only and includes each of the bodies mentioned in section 507
“specified charity” means a charity specified by the individual.
(3) For the purposes of this section a body is an “approved agent” if it is approved
by the Inland Revenue for the purpose of paying donations to one or more
715 Approval of schemes: regulation by Treasury
(1) The Treasury may by regulations prescribe the circumstances in which the
Inland Revenue may grant or withdraw approval of any—
(b) kind of scheme, or
(2) The circumstances, whether relating to the terms of schemes or the
qualifications of agents or otherwise, are to be such as the Treasury think fit.
(3) The Treasury may by regulations make provision—
(a) requiring a payer or agent who participates (or has at any time
participated) in an approved scheme under this Part—
(i) to comply, within a prescribed period, with any notice which
the Inland Revenue give to the payer or agent to make available
for their inspection documents or records of a prescribed kind,
(ii) in prescribed circumstances, to furnish to the Inland Revenue
(b) for, and in relation to, appeals to the Special Commissioners against the
Inland Revenue’s refusal to approve, or their withdrawal of approval
(ii) kind of scheme, or
(c) generally for giving effect to sections 713 and 714.
In this subsection “prescribed” means prescribed by the regulations.
Alteration of amounts
716 Alteration of amounts by Treasury order
(1) The Treasury may by order increase or further increase the sums of money
specified in any of the following provisions.
(2) They are—
(a) section 179(2)(a) (limit on exception for advances for necessary
(b) section 241(3)(a) and (b) (incidental overnight expenses: overall
(c) section 264(2) and (3) (annual parties and functions),
(d) section 287(1) (limit on exemption under Chapter 7 of Part 4: removal
benefits and expenses),
(e) section 322(1) and (4) (suggestion awards: “the permitted maximum”),
(f) section 323(2) (long service awards),
(g) section 324(6) (small gifts from third parties), and
(h) section 358(3)(b) (business entertainment and gifts: other exceptions).
(3) An order relating to section 241(3)(a) or (b) may make provision for
determining what earnings are treated as received on or after the date when the
order comes into force.
(4) An order relating to section 287(1) applies to a change of an employee’s
residence where the employment change occurs on or after the day specified in
the order for the purpose.
“The employment change” here has the same meaning as in Chapter 7 of Part
4 (see section 275).
Orders and regulations
717 Orders and regulations made by Treasury or Board
(1) Any power of the Treasury or the Board of Inland Revenue to make any order
or regulations under this Act is exercisable by statutory instrument.
This is subject to subsection (2).
(2) Subsection (1) does not apply to the power conferred by section 28(5) (overseas
Crown employment: order excepting certain earnings).
(3) Any statutory instrument containing any order or regulations made by the
Treasury or the Board of Inland Revenue under this Act is subject to annulment
in pursuance of a resolution of the House of Commons.
This is subject to subsection (4).
(4) Subsection (3) does not apply to any statutory instrument made under section
343(3) (deduction for professional membership fees: order adding certain fees).
718 Connected persons
Section 839 of ICTA (how to tell whether persons are connected) applies for the
purposes of this Act.
719 Control in relation to a body corporate
Section 840 of ICTA (meaning of control in relation to a body corporate) applies
for the purposes of this Act, unless otherwise indicated.
720 Meaning of “the Inland Revenue” etc.
(1) In this Act “the Inland Revenue” means any officer of the Board of Inland
(2) In this Act “the Board of Inland Revenue” means the Commissioners of Inland
Revenue (as to which, see in particular the Inland Revenue Regulation Act 1890
(3) Functions conferred on the Board of Inland Revenue by this Act are within
section 4A of that Act (functions of Board exercisable by officer acting with
721 Other definitions
(1) In this Act—
“cash voucher” has the same meaning as in Chapter 4 of Part 3 (see section
“credit-token” has the same meaning as in Chapter 4 of Part 3 (see section
“foreign employer” means—
(a) in the case of an employee resident in the United Kingdom, an
individual, partnership or body of persons resident outside the
United Kingdom and not resident in the United Kingdom or the
Republic of Ireland, and
(b) in the case of an employee not resident in the United Kingdom,
an individual, partnership or body of persons resident outside
and not resident in the United Kingdom,
“non-cash voucher” has the same meaning as in Chapter 4 of Part 3 (see
“the normal self-assessment filing date”, in relation to a tax year, means
the 31st January following the tax year,
“personal representatives”, in relation to a person who has died, means—
(a) in the United Kingdom, persons responsible for administering
the estate of the deceased, and
(b) in a country or territory outside the United Kingdom, those
persons having functions under its law equivalent to those of
administering the estate of the deceased,
“tax year” means, in relation to income tax, a year for which any Act
provides for income tax to be charged, and
“the tax year 2003–04” means the tax year beginning on 6th April 2003
(and any corresponding expression in which two years are similarly
mentioned is to be read in the same way).
(2) In the application of this Act to Scotland, “assignment” means an assignation.
(3) Any reference in this Act to being domiciled in the United Kingdom is to be
read as a reference to being domiciled in any part of the United Kingdom.
(4) For the purposes of this Act the following are members of a person’s family—
(a) the person’s spouse,
(b) the person’s children and their spouses,
(c) the person’s parents, and
(d) the person’s dependants.
(5) For the purposes of this Act the following are members of a person’s family or
(a) members of the person’s family,
(b) the person’s domestic staff, and
(c) the person’s guests.
(6) The following provisions (which relate to the legal equality of illegitimate
children) are to be disregarded in interpreting references in this Act to a child
(a) section 1 of the Family Law Reform Act 1987 (c. 42);
(b) the paragraph inserted in Schedule 1 to the Interpretation Act 1978 (c.
30) by paragraph 73 of Schedule 2 to the 1987 Act;
(c) section 1(2) of the Law Reform (Parent and Child) (Scotland) Act 1986
(d) Article 155 of the Children (Northern Ireland) Order 1995 (S.I. 1995/755
(7) In the employment income Parts any reference to earnings which is not limited
by the context—
(a) to earnings within Chapter 1 of Part 3, or
(b) to any other particular description of earnings,
includes a reference to any amount treated as earnings by any of the provisions
mentioned in section 7(5) (meaning of “employment income” etc.).
Amendments, repeals, citation etc.
722 Consequential amendments
Schedule 6 contains consequential amendments.
723 Commencement and transitional provisions and savings
(1) This Act comes into force on 6th April 2003 and has effect—
(a) for the purposes of income tax, for the tax year 2003-04 and subsequent
tax years, and
(b) for the purposes of corporation tax, for accounting periods ending after
5th April 2003.
(2) Subsection (1) is subject to Schedule 7, which contains transitional provisions
724 Repeals and revocations
(1) The enactments specified in Part 1 of Schedule 8 (which include certain spent
provisions) are repealed to the extent specified.
(2) The instruments specified in Part 2 of that Schedule are revoked to the extent
This Act may be cited as the Income Tax (Earnings and Pensions) Act 2003.