How income tax is charged, calculated and collected — from the classification of income and residence rules through to the final liability under self-assessment.
A single calculation sits at the heart of this topic, and every rule in the chapter feeds into one of its steps. It opens with the scope of the tax — the income–capital distinction, the three categories of taxable income and the Statutory Residence Test — before working through each source in turn: employment income with its benefits in kind and strict deduction test, trading profits with capital allowances and loss reliefs, and the rules for property and partnership income. It then brings the sources together, covering the personal allowance, the savings and dividend allowances, and the order in which the different types of income fill the rate bands. The chapter closes with gift aid and pension reliefs, the full step-by-step calculation, and the deadlines and penalties of the self-assessment regime.
