(1)M1Income tax under Schedule A shall be charged on and paid by the persons receiving or entitled to the profits or gains in respect of which tax under that Schedule is directed by the Income Tax Acts to be charged.
(2)Subsection (1) above does not apply for the purposes of the Corporation Tax Acts.
Marginal Citations
M1SOURCE-1970 s. 68
Yn ddilys o 31/07/1998
(1)Except as otherwise expressly provided, the profits of a Schedule A business are computed in the same way as the profits of a trade are computed for the purposes of Case I of Schedule D.
(2)The following provisions apply in accordance with subsection (1)—
section 72 (apportionment);
the provisions of Chapter V of Part IV (computational provisions relating to the Schedule D charge), except as mentioned in subsection (4) below;
section 577 (business entertainment expenses);
section 577A (expenditure involving crime);
sections 579 and 580 (redundancy payments);
sections 588 and 589 (training courses for employees);
sections 589A and 589B (counselling services for employees);
section 73(2) of the M2Finance Act 1988 (consideration for restrictive undertakings);
section 43 of the M3Finance Act 1989 (deductions in respect of certain emoluments);
section 76 of that Act (expenses in connection with non-approved retirement benefit schemes);
sections 112 and 113 of that Act (expenditure in connection with provision of security asset or service);
sections 42 and 46(1) and (2) of the Finance Act 1998 (provisions as to computation of profits and losses).
(3)Section 74(1)(d) of this Act (disallowance of provisions for future repairs) applies in relation to a Schedule A business as if the reference to premises occupied for the purposes of the trade were to premises held for the purposes of the Schedule A business.
(4)The following provisions in Chapter V of Part IV of this Act do not apply, or are excepted from applying, in accordance with subsection (1)—
section 82 (interest paid to non-residents),
section 87 (treatment of premiums taxed as rent),
section 96 (farming and market gardening: relief for fluctuating profits), and
section 98 (tied premises: receipts and expenses treated as those of trade).]
Textual Amendments
F1Ss. 21-21B substituted (with effect as mentioned in s. 38(2)(3) of the amending Act) for s. 21 by Finance Act 1998 (c. 36), s. 38(1), Sch. 5 para. 4 (with Sch. 5 paras. 73, 76)
Marginal Citations
Yn ddilys o 31/07/1998
The following provisions apply for the purposes of Schedule A in relation to a Schedule A business as they apply for the purposes of Case I of Schedule D in relation to a trade—
sections 103 to 106, 108, 109A and 110 (post-cessation receipts and expenses, etc.);
section 113 (effect for income tax purposes of change in the persons engaged in carrying on trade);
section 337(1) (effect of company beginning or ceasing to carry on trade);
section 401(1) (pre-trading expenditure);
section 44 of and Schedule 6 to the Finance Act 1998 (change of accounting basis).]
Textual Amendments
F1Ss. 21-21B substituted (with effect as mentioned in s. 38(2)(3) of the amending Act) for s. 21 by Finance Act 1998 (c. 36), s. 38(1), Sch. 5 para. 4 (with Sch. 5 paras. 73, 76)
Yn ddilys o 31/07/1998
(1)The following provisions have effect for the purpose of applying the charge to tax under Schedule A in relation to mutual business.
(2)The transactions or relationships involved in mutual business are treated as if they were transactions or relationships between persons between whom no relationship of mutuality existed.
(3)Any surplus arising from the business is regarded as a profit (and any deficit as a loss) if it would be so regarded if the business were not mutual.
(4)The person—
(a)to whom the profit arises for corporation tax purposes, or
(b)who is regarded as receiving or entitled to the profit for income tax purposes,
is the person who would satisfy that description if the business were not mutual business.
(5)Nothing in this section affects the operation of section 488 (co-operative housing associations).]
Textual Amendments
F2S. 21C inserted (with effect as mentioned in s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), s. 38(1), Sch. 5 para. 5 (with Sch. 5 paras. 73, 76)
(1)M4The profits or gains arising to a person for any chargeable period which are assessable to tax under Schedule A may, if they arise from more than one source, be assessed in one or more assessments, and in the latter case, each assessment may relate to profits or gains from one or more sources.
(2)M5Subject to subsection (3) below, where an assessment to income tax under Schedule A for any year of assessment is made in that year—
(a)it shall be made on the basis that all sources of income and all amounts relevant in computing profits or gains are the same as for the last preceding year of assessment, and
(b)tax shall be leviable accordingly, but any necessary adjustments shall be made after the end of the year, whether by way of assessment, repayment of tax or otherwise, to secure that tax is charged by reference to the rents or receipts to which the person assessed becomes entitled in the year of assessment.
(3)If before the 1st January in any year a person delivers a statement in writing to the inspector—
(a)showing that since the beginning of the last preceding year of assessment he has ceased to possess one or more sources of income chargeable under Schedule A, and
(b)giving the aggregate of the rents and receipts relevant for the purposes of Schedule A to which he has become or is likely to become entitled in the current year (“the current aggregate”), and
(c)showing that the current aggregate is less than the aggregate of such rents and receipts to which he became entitled in the last preceding year (“the previous aggregate”), and that it would not have been less if he had not ceased to possess the said source or sources,
then, if the inspector is satisfied as to the correctness of the statement, an assessment made on that person in the current year shall be made on an amount which bears to the amount arrived at under subsection (2)(a) above the same proportion as the current aggregate bears to the previous aggregate, and subsection (2)(b) above shall apply accordingly.
(1)M6In any case where—
(a)any tax under Schedule A is charged in respect of profits or gains arising from any land to a person who is not the occupier of the land, and
(b)the tax is not paid by that person (“the person in default”),
the tax may be recovered in accordance with the following provisions of this section.
(2)M7Subject to subsection (3) below, the collector may from time to time, by notice in such form as may be prescribed by the Board, require any lessee of the land or any part thereof whose interest is derived, directly or indirectly, from that held by the person in default, (a “derivative lessee”), to pay to him, on the date or dates specified in the notice, such sum or sums as may be required to satisfy the tax.
(3)M8The sum demanded from a derivative lessee to be paid during any period shall not exceed the amount of the rent or other payments arising out of the land which becomes due from him at the end of the period and payable to the person in default or to another derivative lessee.
(4)M9In default of payment by a derivative lessee of any amount duly demanded of him under subsection (2) above, that amount may be recovered from him in like manner as if he had been charged with tax of that amount.
(5)M10 Where any sum on account of tax has been collected from a derivative lessee in pursuance of this section, he may deduct that sum from any subsequent payment arising and payable as mentioned in subsection (3) above, and shall be acquitted and discharged of the amount so deducted.
(6)M11Where under subsection (5) above, or under that subsection as applied by this subsection, a sum is deducted from an amount payable to another derivative lessee—
(a)that subsection shall apply as if the sum had been collected from him under a demand made under subsection (2) above by the collector; and
(b)where the amounts from which he is entitled, under subsection (5) above, to make deductions during the following 12 months are less than that sum, he shall be entitled to recover from the Board an amount equal to the difference, which shall be treated as reducing the tax recovered under the preceding provisions of this section.
(7)M12In any case where—
(a)rents or receipts from land are received by any person (“the agent”) on behalf of another (“the principal”), and
(b)any tax under Schedule A charged on the principal has not been paid,
the collector may by notice, in such form as may be prescribed by the Board, require the agent to pay to the collector in or towards the satisfaction of the tax any sums from time to time received by the agent on behalf of the principal on account of rents or receipts from any land (including any sums so received which are in his hands when the notice is given) until the liability in respect of the tax has been satisfied; and the agent shall pay all such sums over to the collector accordingly, and the payment shall acquit and discharge him as against the person on whose behalf he received them.
(8)M13If the agent fails to comply with the requirements of a notice duly served on him, he shall be liable to a penalty not exceeding [F3£300] for each failure, and non-compliance as respects sums in his hands when the notice is given, or as respects any one payment subsequently received by him, shall be treated as a separate failure.
Textual Amendments
F31989 s.170(1)in relation to things done or omitted on or after 27July 1989.Previously
“£50”.
Marginal Citations
M6SOURCE-1970 s. 70(1)
M7SOURCE-1970 s. 70(1)(a)
M8SOURCE -1970 s. 70(1)(b)
M9SOURCE-1970 s. 70(1)(c)
M10SOURCE-1970 s.70(1)(d)
M11SOURCE-1970 s. 70(1)(e)
M12SOURCE-1970 s. 70(2)
M13SOURCE-1970 s. 70(2)
(1)M14In this Part, except where the context otherwise requires—
“lease” includes an agreement for a lease, and any tenancy, but does not include a mortgage or heritable security, and “lessee”, “lessor” and “letting” shall be construed accordingly;
“lessee” and “lessor” include respectively the successors in title of a lessee or a lessor;
“premises” includes any land; and
“” includes any like sum, whether payable to the immediate or a superior landlord or to a person connected (within the meaning of section 839) with the immediate or a superior landlord.
(2)M15For the purposes of this Part, any sum (other than rent) paid on or in connection with the granting of a tenancy shall be presumed to have been paid by way of premium except in so far as other sufficient consideration for the payment is shown to have been given.
(3)M16Where paragraph (c) of section 38(1) applies, the premium, or an appropriate part of the premium, payable for or in connection with either lease mentioned in that paragraph may be treated as having been required under the other.
(4)References in this section to a sum shall be construed as including the value of any consideration, and references to a sum paid or payable or to the payment of a sum shall be construed accordingly.
(5)M17In the application of this Part to Scotland—
“assignment” means an assignation;
“intermediate landlord” means, where an occupying lessee is a sub-lessee, any person for the time being holding the interest of landlord under a sub-lease which comprises the property of which the occupying lessee is sub-lessee, but does not include the immediate landlord;
“” includes in particular a grassum payable to any landlord or intermediate landlord on the creation of a sub-lease; and
“reversion” means the interest of the landlord in the property subject to the lease.
(6)M18In Schedule A and in sections 25 to 31—
(a)references to a lease extend only to a lease conferring a right, as against the person whose interest is subject to the lease, to the possession of the premises;
(b)“rent” includes a payment by the tenant to defray the cost of work of maintenance of, or repairs to, the demised premises, not being work required by the lease to be carried out by the tenant; and
(c)“tenant’s repairing lease” means a lease where the tenant is under an obligation to maintain and repair the whole or substantially the whole of the premises comprised in the lease.
(7)For the purposes of Schedule A and sections 25 to 31, a lease shall be taken to be at a full rent if the rent reserved under the lease (including an appropriate sum in respect of any premium under the lease) is sufficient, taking one year with another, to defray the cost to the lessor of fulfilling his obligations under the lease and of meeting any expenses of maintenance, repairs, insurance and management of the premises subject to the lease which fall to be borne by him.