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Annual payments made by individuals and non corporate bodies

E1.801 Duty to deduct tax from annual payments, and relief for payer

Annual payments were historically treated under the rules for charges on income. These allowed for the shift of income out of the hands of the payer and into the hands of the recipient. These rules were rewritten in ITA 2007 and a brief historical background is provided at the end of this article.

In the modern context, the receipt of annual payments is charged to income tax in the hands of the recipient as miscellaneous income¹ (see E1.510), unless these payments are taxed under other provisions or specifically exempted². The exemptions³ are discussed in E.1551 and E1.552 looks specifically at exemptions that apply to certain payments made by individuals⁴.

The treatment of annual payments from the perspective of the payer is discussed in this article. However, in practice the application