Income Tax Act 2007 section 946

Payments within this section

Section 946 identifies the specific types of payment that fall within the tax collection mechanism of this Chapter, where UK resident companies or other companies are required to deduct income tax at source.

• Payments from which a UK resident company must deduct income tax include yearly interest, building society securities, UK public revenue dividends, annual payments by non-individuals, patent royalties, royalties paid to overseas owners, patent sale proceeds paid to non-UK residents, chargeable payments linked to exempt distributions, and payments to non-UK residents under anti-avoidance directions.
• Payments of manufactured interest on UK securities made by UK resident companies (or similar entities) also fall within this section.
• The section acts as a gateway provision — only the payments listed here are subject to the direct collection and assessment rules that HMRC uses to recover income tax deducted at source by companies.
• Where annual payments or patent royalties are made by individuals, those amounts are collected through self-assessment rather than through this company-focused collection mechanism.