Scheme of income tax (2023-24)
por Julia Bowyer
1. Qualifying Care Relief
1.1. Available for individuals who provide qualifying care
1.2. Relief depends on level of qualifying care receipts compared to an individual's limit
1.2.1. Total receipts < individual's limit
1.2.1.1. Receipt exempt from income tax
1.2.2. Total receipts > individual's limit
1.2.2.1. May elect for alternative method of calculating profits
1.3. Special rules for capital allowances
2. The High Income Child Benefit Charge (HICBC)
2.1. Charge to income tax
2.1.1. Person or their partner entitled to child benefit
2.1.2. Adjusted net income (ANI) > £50,000
2.1.3. ANI exceeds partners
2.2. ANI = net income - gross gift aid and personal pension contributions
2.3. Charge = % of child benefit received
2.3.1. ANI < £50,000
2.3.1.1. 0%
2.3.2. ANI between £50,000 and £60,000
2.3.2.1. 1% for every £100 of ANI above £50,000
2.3.3. ANI > £60,000
2.3.3.1. 100%
3. Relief for peer-to-peer investments
3.1. Relief for losses on irrecoverable peer-to-peer (P2P) loans
3.2. Relief only against interest received through P2P platforms
3.3. Relief deducted at step 2 of the income tax calculation
3.4. Subsequent recoveries treated as interest from a P2P loan
4. Main income tax acts
4.1. ITEPA 2003
4.1.1. Income Tax (Earnings and Pensions) Act 2003
4.2. ITTOIA 2005
4.2.1. Income Tax (Trading and Other Income) Act 2005
4.3. ITA 2007
4.3.1. Income Tax Act 2007
5. Calculating income tax liability
5.1. Income tax liability for a tax year follows seven-step computation
5.2. Rates of income tax applied to a person's taxable income
5.3. Taxable income = total income - deductible amounts
6. Reliefs
6.1. Long list of reliefs available
6.1.1. Relief for trade losses etc.
6.2. Deducted at step 2 of tax liability calculation
6.3. Cap applies to certain reliefs
6.3.1. Higher of £50,000 and 25% of income