1 The charge to income tax.U.K.
[F1(1)Income tax is charged in accordance with the Income Tax Acts on—
(a)F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)all amounts which are charged to tax under any of the following provisions of ITEPA 2003—
(i)Part 2 (employment income),
(ii)Part 9 (pension income), and
(iii)Part 10 (social security income), F3. . .
[F4(ba)all amounts which are charged to tax under any of the following provisions of ITTOIA 2005—
(i)Part 2 (trading income),
(ii)Part 3 (property income),
(iii)Part 4 (savings and investment income), and
(iv)Part 5 (miscellaneous income), and]
(c)any other amounts which, under the Income Tax Acts, are charged to income tax.]
(2)M1 Where any Act enacts that income tax shall be charged for any year, income tax shall be charged for that year—
[F5(aa)in respect of so much of an individual’s total income as does not exceed £1,500, at such rate as Parliament may determine to be the starting rate for that year;]
(a)in respect of any income which does not fall within [F6paragraph (aa) above or] paragraph (b) below, at such rate as Parliament may determine to be the basic rate for that year;
[F7(b)in respect of so much of an individual’s total income as exceeds [F8£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.
[F9(2A)The amount up to which an individual’s income is by virtue of subsection (2) above chargeable for any year at the starting rate shall be known as the starting rate limit.]
(3)M2 The amount up to which an individual’s income is by virtue of subsection (2) above chargeable for any year at the [F10[F11starting rate] or 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 bandsF12.
(4)M3 If the retail prices index for the month of [F13September] preceding a year of assessment is higher than it was for the previous [F13September], then, unless Parliament otherwise determines, subsection (2) above shall apply for that year as if for [F14each of the amounts 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 [F15 and—
(a)if the result in the case of the amount specified in subsection (2)(aa) above is not a multiple of £10, rounding it up to the nearest amount which is such a multiple, and
(b)if the result in the case of the amount specified in subsection (2)(b) above is not a multiple of £100, rounding it up to the nearest amount which is such a multiple.]
.
[F16(5A)Subsection (4) above shall not require any change to be made in the amounts deductible or repayable under [F17PAYE regulations] during the period beginning with 6th April and ending with 17th May in the year of assessment.]
F18(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)The Treasury shall before each year of assessment make an order specifying the [F19amounts] which by virtue of subsection (4) above will be treated as specified for that year in subsection (2) above.
[F20(6A)Where income tax at the basic rate has been borne on income chargeable at the [F21starting rate] any necessary repayment of tax shall be made on the making of a claim.]
(7)Part VII contains general provisions relating to the taxation of income of individuals.
Textual Amendments
F1S. 1(1) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 2(2) (with Sch. 7)
F2S. 1(1)(a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 2(a), Sch. 3 (with Sch. 2)
F3Word at the end of s. 1(1)(b) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 2(b), Sch. 3 (with Sch. 2)
F4S. 1(1)(ba) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 2(b) (with Sch. 2)
F5S. 1(2)(aa) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 22(1)
F6Words in s. 1(2)(a) inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by Finance Act 1992 (c. 20), s. 9(3)(10)(11).
F71988(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;”.
F81990 s.17(1)(b)for 1990-91. (Art. 2(2)of S.I. 1990 No.677 (in Part III Vol.5)was not operated.)
F9S. 1(2A) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 22(2)
F10Words in s. 1(3) inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by Finance Act 1992 (c. 20), s. 9(5)(10)(11).
F11Words in s. 1(3) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 22(3)
F12Repealed by 1988(F) s. 148 and Sch. 14 Part IV for 1988-89 and subsequent years
F13Words in s. 1(4) substituted (27.7.1993 with effect for year 1994-95 and subsequent years of assessment) by 1993 c. 34, s. 107(2)(a)(8)
F14Words in s. 1(4) substituted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by virtue of Finance Act 1992 (c. 20), s. 9(6)(10)(11).
F15Words in s. 1(4) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 22(4)
F16S. 1(5A) inserted (27.7.1999 with effect for the year 1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 25(2)
F17Words in s. 1(5A) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 2(3) (with Sch. 7)
F18S. 1(5) repealed (27.7.1993 with effect for the year 1994-95 and subsequent years of assessment) by 1993 c. 34, ss. 107(2)(b)(8), 213, Sch. 23, Pt.III
F19Word in s. 1(6) substituted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by virtue of Finance Act 1992 (c. 20), s. 9(7)(10)(11).
F20S. 1(6A) inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by Finance Act 1992 (c. 20), s. 9(8)(10)(11).
F21Words in s. 1(6A) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 22(6)
Modifications etc. (not altering text)
C1 See s.686—income of trustees chargeable at higher rate.
C2S. 1(2) amended (1991-92) by S.I. 1991/732, art. 2(2)
S. 1(2) amended (1992-93) by 1992 c. 20, s. 10(2)(b) (in place of S.I. 1992/622, art. 2(2))
S. 1(2) amended (1993-94) by 1993 c. 34, s. 51(2) (in place of S.I. 1993/755, art. 2(2))
S. 1(2) amended (1994-95) by 1994 c. 9, s. 75(2) (in place of S.I. 1993/2948, art. 2(2))
S. 1(2)(b) amended (1995-96) by S.I. 1994/3012, art. 2(2)(b)
S. 1(2)(aa) amended (1995-96) by 1995 c. 4, s. 35(2) (in place of S.I. 1994/3012, art. 2(2)(a))
S. 1(2) amended (1996-97) by 1996 c. 8, s. 72(2) (in place of S.I. 1995/3031, art. 2(2))
S. 1(2)(b) amended (1997-98) by S.I. 1996/2952, art. 2(2)(b)
S. 1(2)(aa) amended (1997-98) by 1997 c. 16, s. 54(2) (in place of S.I. 1996/2952, art. 2(2)(a))
S. 1(2) amended (1998-99) by S.I. 1998/755, art. 2(2)
S. 1(2)(b) amended (1999-00) by S.I. 1999/597, art. 2(2)(b) (the effect of art. 2(2)(a) being superseded by 1999 c. 16, s. 22(1) which substitutes s. 1(2)(aa))
S. 1(2) amended (2000-01) by S.I. 2000/806, art. 2(2)
S. 1(2)(b) amended (2001-02) by S.I. 2001/638, art. 2(2)(b)
S. 1(2)(aa) amended (2001-02) by 2001 c. 9, s. 51(1) (in place of S.I. 2001/638, art. 2(2)(a))
S. 1(2) amended (2002-03) by S.I. 2002/707, art. 2(2)
S. 1(2) amended (2003-04) by S.I. 2003/840, art. 2
S. 1(2) amended (2004-05) by S.I. 2004/772, art. 2
S. 1(2) amended (2005-06) by S.I. 2005/716, art. 2
S. 1(2) amended (2006-07) by S.I. 2006/872, art. 2
S. 1(2) amended (2007-08) by S.I. 2007/943, art. 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.
C6S. 1(4) excluded for the year 1991-92 by Finance Act 1991 (c. 31, SIF 63:1), s. 21(2)
S. 1(4) excluded for the year 1992-93 by Finance Act 1992 (c. 20), s. 10(2)(a)(5).
S. 1(4) excluded for the year 1993-94 by Finance Act 1993 (c. 34), s. 51(2)
S. 1(4) excluded for the year 1994-95 by Finance Act 1994 (c. 9), s. 75(2)
S. 1(4) excluded for the year 1995-96 by Finance Act 1995 (c. 4), s. 35(2)
S. 1(4) excluded for the year 1996-97 by Finance Act 1996 (c. 8), s. 72(2)
S. 1(4) excluded for the year 1999-00 by Finance Act 1999 (c. 16), s. 22(5)
S. 1(4) excluded for the year 2001-02 by Finance Act 2001 (c. 9), s. 51(2)
C7S. 1(5A) modified for the year 2002-03 by Finance Act 2002 (c. 23), s. 27(a)
S. 1(5A) modified for the year 2003-04 by Finance Act 2003 (c. 14), s. 132
C8 See S.I. 1989 No. 467 in Part III Vol.5.
Marginal Citations
M1Source—1970 s.1; 1971 s.32(1); 1980 s.24(2); 1987 s.20(1)
M2Source‐1980 s.24(3); 1984 Sch.7 3(5)
M3Source—1980 s.24(4), (7), (9)