Income Tax Act 2007 section 901

Deduction from annual payments made by other persons

Section 901 requires persons other than individuals (such as companies, trusts and other entities) to deduct income tax at the basic rate from qualifying annual payments, and sets out how the tax is collected depending on whether the payer has modified net income.

• Any qualifying annual payment made by a non-individual payer is subject to a deduction of income tax at the basic rate for the tax year in which the payment is made.
• The section does not apply where an individual's personal representatives make a payment the deceased would have been liable for, unless that payment would have been made for genuine commercial reasons connected with the individual's trade, profession or vocation.
• Where the payer has some modified net income for the tax year, the deducted tax is collected through the payer's self-assessment return; where the payer has no modified net income, the tax is collected under Chapter 15 (for UK resident companies) or Chapter 16 (for all other payers).
• The scope of this section is wider than the equivalent rules for individuals, because the exemption that limits charges on income for individuals does not apply to non-individual payers — so all qualifying annual payments are caught, not just commercial ones.