Part 15

Deduction of income tax at source
Chapter 6

Deduction from annual payments and patent royalties

Duty to deduct from annual payments

Deduction from annual payments made by other persons
901
1
This section applies to any payment made in a tax year if—
a
it is a qualifying annual payment, and
b
the person who makes it is not an individual.
2
But this section does not apply if—
a
an individual's personal representatives make the payment,
b
the individual would have been liable to make it if the individual had not died, and
c
the payment would not have been made for genuine commercial reasons in connection with the individual's trade, profession or vocation, had it been made by the individual.
3
If the person who makes the payment has some modified net income for the tax year (see section 1025)—
a
the person must, on making it, deduct from it a sum representing income tax on it at the basic rate in force for the tax year, and
b
income tax equal to the sum required to be deducted is to be collected through the person's self-assessment return (see Chapter 17).
4
If the person who makes the payment has no modified net income for the tax year the person by or through whom the payment is made must, on making it, deduct from it a sum representing income tax on it at the basic rate in force for the tax year in which the payment is made .
5
For provision about the collection of income tax in respect of a payment from which a sum must be deducted under subsection (4)—
a
see Chapter 15 if the person making the payment is a UK resident company, and
b
otherwise see Chapter 16.
Words in s. 901(4) substituted (21.7.2008 with effect in accordance with Sch. 1 para. 65 of the amending Act) by Finance Act 2008 (c. 9), Sch. 1 para. 29
Ss. 900, 901 applied by S.I. 2006/964, reg. 46B(2) (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Authorised Investment Funds (Tax) (Amendment) Regulations 2013 (S.I. 2013/1772), regs. 1(1), 2(2))
Pt. 15 modified (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 551(4), 1329(1) (with Pts. 1, 2, Sch. 2 para. 78)
Ss. 900, 901 applied by S.I. 2009/3001, reg. 124B(2) (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Offshore Funds (Tax) (Amendment No. 3) Regulations 2013 (S.I. 2013/1770), regs. 1(1), 2(3))
S. 901 excluded (1.1.2011) by The London Olympic Games and Paralympic Games Tax Regulations 2010 (S.I. 2010/2913), regs. 1, 3(3) (with regs. 9, 11)