Income and Corporation Taxes Act 1988

1 The charge to income tax. U.K.

(1) M1 Income tax shall be charged in accordance with the provisions of the Income Tax Acts in respect of all property, profits or gains respectively described or comprised in the Schedules, A,BF1 , C, D, E and F, set out in sections 15 to 20 or which in accordance with the Income Tax Acts are to be brought into charge to tax under any of those Schedules or otherwise.

(2) M2 Where any Act enacts that income tax shall be charged for any year, income tax shall be charged for that year—

(a) in respect of any income which does not fall within paragraph (b) below, at such rate as Parliament may determine to be the basic rate for that year;

[F2 (b) in respect of so much of an individual’s total income as exceeds [F3 £20,700] at such higher rate as Parliament may determine]

but this subsection has effect subject to any provision of the Income Tax Acts providing for income tax to be charged at a different rate in certain cases.

(3) M3 The amount up to which an individual’s income is by virtue of subsection (2) above chargeable for any year at the basic rate shall be known as the basic rate limit,and the parts of income in excess of the basic rate limit which are specified in paragraph (b) of that subsection shall be known respectively as the first, second, third, fourth and fifth higher rate bandsF4 .

(4) M4 If the retail prices index for the month of December preceding a year of assessment is higher than it was for the previous December, then, unless Parliament otherwise determines, subsection (2) above shall apply for that year as if for [F5 the amount] specified in that subsection as it applied for the previous year (whether by virtue of this subsection or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index and, if the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple.

(5) Subsection (4) above shall not require any change to be made in the amounts deductible or repayable under section 203 [F6 during the period beginning with 6th April and ending with 17th May in the year of assessment.]

(6) The Treasury shall before each year of assessment make an order specifying the [F7 amount] which by virtue of subsection (4) above will be treated as specified for that year in subsection (2) above.

(7) Part VII contains general provisions relating to the taxation of income of individuals.

Textual Amendments

F1 Repealed by 1988(F) s. 148 and Sch. 14 Part V from 6 April 1988

F2 1988(F) s.24(2)(a)for 1988-89.Previously

“(b) in respect of so much of an individual's total income as exceeds £17,900, at such higher rates respectively as Parliament may determine in relation to the first £2,500, the next £5,000, the next £7,900, the next £7,900 and the remainder;”.

F3 1990 s.17(1)(b)for 1990-91. (Art. 2(2)of S.I. 1990 No.677 (in Part III Vol.5)was not operated.)

F4 Repealed by 1988(F) s. 148 and Sch. 14 Part IV for 1988-89 and subsequent years

F5 1988(F) s.24(2)(c).Previously

“each of the amounts”.

F6 1990 s.17(2)for 1990-91and subsequent years. Previously

“between the beginning of a year of assessment and 5th May (“18th May”

for 1989-90—see 1989 s.32.) in that year.”.

F7 1988(F) s.24(2)(d).Previously

“amounts”.

Modifications etc. (not altering text)

C1 See s.686—income of trustees chargeable at higher rate.

C2 S. 1(2) amended (subject to Parliament's determination otherwise) by S.I. 1991/732, art. 2(1)(2).

S. 1(2) amended (subject to Parliament's determination otherwise) by S.I. 1992/622, art. 2(1)(2).

C3 See 1990 s.17(1)—basic rate 25%and higher rate 40%for 1990-91.

C4 For earlier years see Table C Vol.1.

C5 See—1988(F) s.24(2)—indexation not to apply for 1988-89.1990 s.17(1)—indexation not to apply for 1990-91.

C6 S. 1(4) excluded for the year 1991-92 by Finance Act 1991 (c. 31, SIF 63:1), s. 21(2)

C7 See S.I. 1989 No. 467 in Part III Vol.5.

Marginal Citations

M1 Source—1970 s.1

M2 Source—1970 s.1; 1971 s.32(1); 1980 s.24(2); 1987 s.20(1)

M3 Source‐1980 s.24(3); 1984 Sch.7 3(5)

M4 Source—1980 s.24(4), (7), (9)