Income Tax Act 2007 section 968

Treatment of sums representing income tax

Section 968 explains how sums paid to HMRC under the deduction-at-source regime for entertainers and sportspersons (section 966) are treated for tax purposes, including how overpayments and cases where no liability exists are handled.

• Sums paid to HMRC under section 966 are treated as payments on account of another person's income tax or corporation tax liability, with the identity of that person and the relevant liability determined by prescribed regulations.
• Under the regulations, the "other person" is normally the recipient of the payment or transfer, but where the recipient is connected with the performer, the other person is treated as the performer themselves.
• Where the sum paid to HMRC exceeds the actual tax liability, HMRC must refund the appropriate excess to the other person; where no tax liability is found at all, HMRC must repay the full sum to the recipient of the original payment or transfer.
• References to a "sum" in this context do not include any amount representing interest.