Revenue Note for Guidance

PART 15 Personal Allowances and Reliefs and Certain Other Income Tax and Corporation Tax Reliefs

CHAPTER 1 Personal allowances and reliefs

Overview

Chapter 1 of Part 15 sets out the personal income tax reliefs available to individuals. Most of the reliefs are formal tax credits which are set against the income tax otherwise payable. Others are determined by reference to the standard rate of income tax, in effect, also tax credits. The balance are given by way of a deduction from income and accordingly attract relief at the taxpayer’s marginal rate of tax.

The initial sections of the Chapter (that is, sections 458 to 460) are concerned with providing for general provisions applicable to all the reliefs provided for in the Chapter. These general provisions are also applicable to certain other reliefs set out elsewhere in this Act. These other reliefs are listed in the Table to section 458.

458 Deductions allowed in ascertaining taxable income and provisions relating to reductions in tax

(1) This section provides that an individual on making a claim and on submitting a return of his/her total income on the prescribed form is, subject to the rules governing the various tax credits, deductions and reliefs, entitled —

for the purpose of computing his/her taxable income to have such deductions as are specified in Part 1 of the Table to this section made from his/her total income, and
to have the income tax to be charged reduced by such tax credits and other reductions as are specified in Part 2 of that Table made in ascertaining his/her final income tax liability.

(1A) Where an individual is entitled to a tax credit specified in Part 2 of the Table to the section, that tax credit is to be used to reduce the tax charged on an individual, other than under section 16(2), by the lesser of—

the amount of the tax credit, and
the amount required to reduce the tax chargeable to nil.

(1B) The requirement for a claim for relief to be accompanied by a return of income does not apply where the claim is —

for the purposes of the operation of PAYE, or
in relation to a claim for repayment of tax deducted under PAYE.

A self-employed person with PAYE income is covered by (a), but not (b) – in that instance they continue to be obliged to submit a return of income.

(2) The Table to the section lists the sections under which a deduction from total income, a tax credit or reduction in tax may be made. All claims for such deductions from total income, tax credits and such reductions in tax must be made in accordance with subsections (3) and (4) of section 459 and paragraph 8 of Schedule 28. In strictness, therefore, before any of the reliefs specified in the Table can be granted, a claim and a return of income on the prescribed form must be made. In practice, however, this requirement is generally not enforced.

TABLE
Part 1
Section 372AR	(Relief for owner occupiers)
Section 372AAB	(Relief for owner occupiers, Living City Initiative)
Section 467	(Employed person taking care of incapacitated individual)
Section 469	(Relief for health expenses)
Section 471	(Relief for contributions to permanent health benefit schemes)
Section 472A	(Relief for the long-term unemployed)
Section 472AB	(Earned income tax credit)
Section 472B	(Seafarer allowance, etc)
Section 472BA	(Fisher tax credit)
Section 479	(Relief for new shares purchased on issue by employees)
Section 481	(Relief for investment in films)
Section 489	(BES and Seed Capital relief)
Section 493	(Seed capital relief)
Paragraphs 12 and 20 of Schedule 32	(Transitional Provisions)
Part 2
Section 244	(Relief for interest paid on certain home loans)
Section 461	(Basic personal tax credit)
Section 461A	(Additional tax credit for certain widowed persons)
Section 462B	(Single person child carer credit)
Section 463	(Widowed parent tax credit)
Section 464	(Age tax credit)
Section 465	(Incapacitated child tax credit)
Section 466	(Dependent relative tax credit)
Section 466A	(Home carer tax credit)
Section 468	(Blind person’s tax credit)
Section 470	(Relief for insurance against expenses of illness)
Section 470A	(Relief for premiums under qualifying long-term care policies)
Section 472	(Employee tax credit)
Section 472C	(Relief for trade union subscriptions)
Section 473	(Allowance for rent paid by certain tenants)
Section 473A	(Relief for fees paid for third level education etc.)
Section 476	(Relief for fees paid for training courses)
Section 477	(Relief for service charges)
Section 478	(Relief for payments made by certain persons in respect of alarm systems)
Section 478A	(Stay and Spend tax credit)

Relevant Date: Finance Act 2021