Income Tax Act 2007 section 944

Directions for deduction from payments to non-UK residents

Section 944 allows HMRC officers to direct that income tax at the basic rate be deducted at source from certain payments made to non-UK residents, particularly where those payments arise under the tax avoidance provisions concerning sales of occupation income.

• Where a person entitled to a taxable amount under the sales of occupation income rules (Chapter 4 of Part 13) is non-UK resident, an HMRC officer may direct that basic rate income tax be deducted at source from any payment forming all or part of that amount.
• The deduction at source does not change the recipient's final tax liability, including any liability under sections 768(4) or 786(4) for recovery of tax where consideration is receivable by a person not assessed.
• Collection of the tax deducted follows Chapter 15 if the payer is a UK resident company, or Chapter 16 otherwise.
• A direction can only be given where there is a present entitlement to a payment at the time of the direction — a mere prospect of future entitlement, however imminent, is not sufficient.