Income Tax Bill

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 15 — Collection: deposit-takers, building societies and certain companies
471

960
Further provisions about assessments
(1)
Income tax assessed on a person under this Chapter is due on the date
mentioned in section 951 and an appeal against the assessment does not affect
the date when the income tax is due under that section.
(2)
On the determination of an appeal against an assessment under this Chapter
5
any income tax overpaid must be repaid.
(3)
Any income tax assessable under any one or more of the provisions of this
Chapter may be included in a single assessment if all the income tax is due on
the same date.
Supplementary
10
961
Relationship between Chapter and Income Tax Acts powers
Nothing in this Chapter affects any powers conferred by the Income Tax Acts
for the recovery of income tax by means of an assessment or otherwise.
962
Power to make regulations modifying Chapter
(1)
The Commissioners for Her Majesty’s Revenue and Customs may by
15
regulations modify, replace or supplement any of the provisions of this
Chapter for the purpose of regulating the time and manner in which persons
making section 946 payments—
(a)
are to account for and pay income tax which is to be collected from
them in respect of those payments, and
20
(b)
are to be repaid income tax in respect of payments received by them.
(2)
In particular, regulations under this section may, in relation to income tax for
which a person is liable to account,—
(a)
modify any provision of Parts 2 to 6 of TMA 1970, or
(b)
apply any such provision with or without modifications.
25
(3)
Regulations under this section may—
(a)
make different provision for different kinds of payer,
(b)
make different provision for different circumstances, and
(c)
authorise the Commissioners for Her Majesty’s Revenue and Customs,
if they think there are special circumstances justifying it, to make
30
special arrangements in relation to—
(i)
income tax for which a person is liable to account, or
(ii)
the repayment of income tax suffered by a person.
(4)
Regulations under this section may contain incidental, supplemental,
consequential and transitional provision and savings.
35
(5)
The Commissioners for Her Majesty’s Revenue and Customs must not make
any regulations under this section unless a draft of them has been laid before
and approved by a resolution of the House of Commons.
(6)
References in this Act and in any other enactment to any of the provisions of
this Chapter are to be read as references to those provisions as modified,
40
replaced or supplemented by provision made by regulations under this
section.

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 17 — Collection through self-assessment return
472

Chapter 16
Collection: certain payments by other persons
963
Collection of income tax on certain payments by other persons
(1)
This section makes provision for the collection of income tax in respect of—
(a)
a payment from which a person other than a UK resident company is
5
required to deduct a sum representing income tax under—
(i)
section 874(2) (certain payments of yearly interest),
(ii)
section 889(4) (payments in respect of building society
securities),
(iii)
section 892(2) (certain payments of UK public revenue
10
dividends),
(iv)
section 901(4) (annual payments made by persons other than
individuals),
(v)
section 903(7) (patent royalties),
(vi)
section 906(5) (royalty payments etc where the owner lives
15
abroad),
(vii)
section 910(2) (proceeds of a sale of patent rights paid to non-
UK residents),
(viii)
section 928(2) (chargeable payments connected with exempt
distributions), or
20
(ix)
section 944(2) (directions for deduction from payments to non-
UK residents), and
(b)
a payment from which a person other than a company is required to
deduct a sum representing income tax under section 919(2)
(manufactured interest for UK securities: payments by UK residents
25
etc).
(2)
The person required to deduct the sum must deliver to an officer of Revenue
and Customs an account of the payment without delay.
(3)
An officer of Revenue and Customs may make an assessment on that person
for income tax equal to the sum required to be deducted.
30
(4)
The provisions of the Income Tax Acts relating to—
(a)
persons chargeable to income tax,
(b)
income tax assessments, and
(c)
the collection and recovery of income tax,

apply (unless excluded expressly or by implication) to the assessment,
35
collection and recovery of income tax which is assessable on persons under this
section.
Chapter 17
Collection through self-assessment return
964
Collection through self-assessment return
40
(1)
This section applies if—
(a)
a person makes a payment from which the person is required to deduct
a sum representing income tax, and

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source
473

(b)
income tax equal to the sum required to be deducted is, under section
900(3), 901(3) or 903(5) or (6), to be collected through the person’s self-
assessment return.
(2)
This section also applies if, in accordance with section 942, income tax is to be
collected through a trustee’s self-assessment return.
5
(3)
The income tax is to be treated for the purposes of TMA 1970 as if it were
income tax charged on the person or trustee.
(4)
Accordingly, the income tax must be taken into account for the purposes of—
(a)
the person’s or trustee’s return under section 8 or 8A of TMA 1970, and
(b)
the person’s or trustee’s assessment to income tax under section 9 of
10
that Act,

(in addition to the person or trustee’s income tax liability calculated in
accordance with Chapter 3 of Part 2 (calculation of income tax liability)).
(5)
But the relevant amount under section 59A of TMA 1970 (payments on account
of income tax) is to be calculated as if the income tax were not taken into
15
account for the purposes of the assessment to income tax under section 9 of
TMA 1970.
Chapter 18
Other regimes involving the deduction of income tax at source
Visiting performers
20
965
Overview of sections 966 to 970
(1)
Sections 966 to 970 make provision for the payment of sums representing
income tax to the Commissioners for Her Majesty’s Revenue and Customs
where certain payments or transfers are made in connection with activities
performed in the United Kingdom by non-UK resident entertainers, sportsmen
25
and sportswomen.
(2)
See also—
section 556 of ICTA (entertainers and sportsmen) which makes provision
in relation to such payments or transfers for the purposes of
corporation tax,
30
Chapter 8 of Part 2 of ITEPA 2003 (application of provisions to workers
under arrangements made by intermediaries), in particular section
48(2) (exclusions from the scope of the Chapter), and
sections 13 and 14 of ITTOIA 2005 (trades and trade profits: visiting
performers).
35
966
Duty to deduct and account for sums representing income tax
(1)
This section applies if—
(a)
an entertainer, sportsman or sportswoman of a prescribed description
(“a performer”) who is non-UK resident for a tax year performs a
relevant activity in the United Kingdom in the tax year, and
40
(b)
a payment or transfer connected with the relevant activity is made.

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source
474

(2)
It does not matter—
(a)
whether the payment or transfer is made to the performer or anyone
else, or
(b)
when the payment or transfer is made.
(3)
If a payment within subsection (1)(b) is made the person who makes the
5
payment must, on making it, deduct from it a sum representing income tax and
account to the Commissioners for Her Majesty’s Revenue and Customs for the
sum.
(4)
If a transfer within subsection (1)(b) is made the person who makes the transfer
must account to the Commissioners for Her Majesty’s Revenue and Customs
10
for a sum representing income tax.
(5)
See section 967 as to the calculation of the sums representing income tax
mentioned in subsections (3) and (4).
(6)
This section does not apply to payments or transfers of such a kind as may be
prescribed.
15
(7)
In this section—
(a)
“relevant activity” means an activity of a prescribed description, and
(b)
a payment or transfer is connected with a relevant activity if it has a
connection of a prescribed kind with that activity.
967
Calculation of sums representing income tax
20
(1)
The sums representing income tax mentioned in section 966(3) and (4) are to be
calculated in accordance with prescribed rules.
(2)
But the sums must not exceed the relevant proportion of the payment
concerned or of the value of what is transferred.

“Relevant proportion” means a proportion equal to the basic rate of income tax
25
for the tax year in which the payment or transfer is made.
(3)
Regulations made by the Treasury may provide, in relation to a transfer to
which section 966 applies, that for the purposes of the Tax Acts the value of
what is transferred is to be calculated in accordance with prescribed rules.
(4)
In particular, rules may include provision—
30
(a)
for the calculation of an amount representing the actual value of what
is transferred,
(b)
for that amount to be treated as a net amount corresponding to a gross
amount from which income tax at the basic rate has been deducted, and
(c)
for the gross amount to be taken to be the value of what is transferred.
35
968
Treatment of sums representing income tax
(1)
This section applies if, in accordance with section 966(3) or (4), a person pays a
sum to the Commissioners for Her Majesty’s Revenue and Customs.
(2)
The sum is treated as paid on account of a liability of another person to income
tax or corporation tax.
40
(3)
The liability and the other person are to be found in accordance with
prescribed rules.

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source
475

(4)
If the sum exceeds the liability concerned, the Commissioners must pay so
much of the sum as is appropriate to the other person.
(5)
If no liability is found, the Commissioners must pay the sum to the recipient of
the relevant payment or transfer.
(6)
The relevant payment or transfer is the payment or transfer—
5
(a)
to which section 966 applies, and
(b)
which gave rise to the payment of the sum.
(7)
A reference to a sum in this section does not include anything representing
interest.
969
Regulations
10
(1)
The Treasury may by regulations—
(a)
make provision enabling the Commissioners for Her Majesty’s
Revenue and Customs to serve notices requiring persons who make
payments or transfers to which section 966 applies to give them
prescribed information in respect of such payments or transfers,
15
(b)
make provision requiring persons who make payments or transfers to
which section 966 applies to make, at prescribed times and for
prescribed periods, returns to the Commissioners containing
prescribed information about payments or transfers and the income tax
for which those persons are accountable in respect of them,
20
(c)
make provision for the collection and recovery of such income tax, for
assessments and claims to be made in respect of it, and for the payment
of interest on it, and
(d)
adapt, or modify the effect of, any enactment relating to income tax for
the purpose of making any provision mentioned in paragraphs (a) to
25
(c).
(2)
The Treasury may also by regulations make provision generally for giving
effect to this section and sections 966 to 968 (including different provision for
different cases or descriptions of case).
970
Supplementary
30
(1)
For the purposes of the Tax Acts a payment to which section 966 applies is
treated as if it were not reduced by the deduction of a sum representing income
tax under that section.
(2)
An officer of Revenue and Customs may disclose, to any person who appears
to the officer to have an interest in the matter, information relevant to
35
determining whether section 966 applies to a payment or transfer.
(3)
An officer is not precluded from doing so by any obligation as to secrecy
imposed by statute or otherwise.
(4)
In this section and sections 966 to 969—
(a)
references to a payment include references to a payment by way of loan
40
of money, and
(b)
references to a transfer do not include references to a transfer of money
but, subject to that, include references to—
(i)
a temporary transfer (as by way of loan), and

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source
476

(ii)
a transfer of a right (whether or not a right to receive money).
(5)
In sections 966 to 969 “prescribed” means prescribed by regulations made by
the Treasury.
Non-resident landlords
971
Income tax due in respect of income of non-resident landlords
5
(1)
The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision for—
(a)
the collection, from non-resident landlord representatives of a
prescribed description, of prescribed amounts of income tax in respect
of non-resident landlord income, and
10
(b)
the assessment and recovery of the income tax on or from such persons.
(2)
“Non-resident landlord income” means income of a person whose usual place
of abode is outside the United Kingdom (“the non-resident”) and which is or
may become chargeable—
(a)
under Schedule A, or
15
(b)
as the profits of a UK property business under Chapter 3 of Part 3 of
ITTOIA 2005.
(3)
“Non-resident landlord representative” means—
(a)
a person by whom any sums are payable to the non-resident which are
to be treated as receipts of a Schedule A business, or a UK property
20
business, carried on by the non-resident, or
(b)
a person who acts on behalf of the non-resident in connection with the
management or administration of any such business.
(4)
A non-resident landlord representative who must pay prescribed amounts of
income tax to the Commissioners for Her Majesty’s Revenue and Customs
25
under regulations under this section is entitled—
(a)
to be indemnified by the non-resident for all such payments, and
(b)
to retain out of any sums otherwise due from the representative to the
non-resident, or received by the representative on behalf of the non-
resident, sums representing income tax sufficient for meeting any
30
liabilities under the regulations to make such payments.
(5)
Subsection (4)(b) applies whether the liability is one which the representative
has discharged or to which the representative is subject.
972
Regulations under section 971
(1)
Regulations under section 971 may, in particular, include all or any of the
35
following provisions—
(a)
provision for the amount of any income tax in respect of non-resident
landlord income, which is to be paid to the Commissioners for Her
Majesty’s Revenue and Customs, to be calculated by reference to
prescribed factors,
40
(b)
provision for the determination in accordance with the regulations of
the period for which, the circumstances in which and the times at which
any payments are to be made to the Commissioners,

Income Tax Bill
Part 15 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source
477

(c)
provision for requiring the payment of interest on amounts which are
not paid to the Commissioners at the times required under the
regulations,
(d)
provision as to the certificates to be given in prescribed circumstances
to the non-resident by a non-resident landlord representative, and as to
5
the particulars to be included in any such certificate,
(e)
provision for the making of repayments of income tax to the non-
resident and for such repayments to be made in prescribed cases to
non-resident landlord representatives,
(f)
provision for the payment of interest by the Commissioners on sums
10
repaid under the regulations,
(g)
provision for the rights and obligations arising under the regulations to
depend on the giving of such notices and the making of such claims and
determinations as may be prescribed,
(h)
provision for the making and determination of applications for
15
requirements of the regulations not to apply in certain cases, and for the
variation or revocation, in prescribed cases, of the determinations made
on such applications,
(i)
provision for appeals with respect to questions arising under the
regulations,
20
(j)
provision requiring non-resident landlord representatives within
section 971(3)(b) who are of a prescribed description to register with the
Commissioners,
(k)
provision requiring persons registered with the Commissioners and
other non-resident landlord representatives of a prescribed description
25
to make returns and supply prescribed information to the
Commissioners and to make available prescribed books, documents
and other records for inspection on behalf of the Commissioners,
(l)
provision for the partnership, as such, to be treated as the non-resident
landlord representative if a liability to make a payment under the
30
regulations arises from amounts payable or things done in the course
of a business carried on by persons in partnership, and
(m)
provision which, in relation to payments of income tax to be made by
virtue of section 971 or to sums retained in respect of such payments,
applies (with or without modifications) any enactment or subordinate
35
legislation having effect apart from section 971 with respect to cases in
which tax is or is treated as deducted from any income.
(2)
Interest required to be paid by regulations under section 971 is to be paid
without deduction of a sum representing income tax and is not to be taken into
account in calculating any income, profits or losses for any tax purposes.
40
(3)
Regulations under section 971 may—
(a)
make different provision for different cases, and
(b)
contain incidental, supplemental, consequential and transitional
provision and savings.
(4)
Provision made by virtue of subsection (3)(b) may, in particular, in connection
45
with any other provision made by regulations under section 971, modify the
operation in any case of section 59A of TMA 1970 (payments on account of
income tax).
(5)
In this section and section 971 “prescribed” means prescribed by, or
determined by an officer of Revenue and Customs in accordance with,
50