PART 3

Tax Credits and Standard Rate Cut-off Point

10 Determination of appropriate tax credits and standard rate cut-off point by inspector.

(1) The amount of the tax credits and standard rate cut-off point appropriate to an employee for any year shall be determined by the inspector who for that purpose may have regard to any of the following matters, namely —

(a) the reliefs from income tax to which the employee is entitled for the year in which the amount of the tax credits and standard rate cut-off point is determined, so far as the employee's title to those reliefs has been established at the time of the determination, but, where the amount of the tax credits and standard rate cut-off point is determined before the beginning of the year for which it is to have effect, the inspector shall disregard any such relief from income tax if he or she is not satisfied that the employee will be entitled to it for that year;

(b) the emoluments of the employee;

(c) where the employee has income (other than emoluments in relation to which the amount of the tax credits and standard rate cut-off point is being determined) the tax credits and standard rate cut-off point appropriate to that employee may be adjusted as necessary to collect the tax due on such income;

(d) where the employee is entitled to reliefs from income tax at the higher rate of tax, the tax credits and standard rate cut-off point appropriate to that employee may be adjusted as necessary to give effect to the relief;

(e) any tax overpaid for any previous year which has not been repaid;

(f) any tax remaining unpaid for any previous year which is not otherwise recovered;

(g) such other adjustments as may be necessary to secure that, so far as possible, the tax in respect of the employee's emoluments for the year to which the tax credits and standard rate cut-off point relate shall be deducted from the emoluments paid during the year.

(2) When an employee requests the inspector to disregard any particular relief or income referred to in subparagraph (a) or (c) of the foregoing paragraph, the inspector shall disregard it for the purposes of that paragraph.

(3) The inspector may disregard part or all of any expenses in respect of which the employee may be entitled to relief from income tax if it is impracticable to take account of all those expenses in determining the appropriate amount of tax credits and standard rate cut-off point, and, where he or she does so, shall direct the employer to disregard an equivalent amount of the employee's emoluments in calculating the tax to be deducted or repaid when any payment of emoluments is made to the employee.