Income Tax

IT is charged on all income that arises in the UK.
UK residents may also be liable for IT on income arising overseas (see Non-UK Income and Non-Residents).

Personal allowances are deducted from income before calculating IT at rates determined by the amount of an individual's income. The married couple's allowances are available only if at least one spouse was born before 6 April 1935. Relief for these allowances is restricted to 10%.

The extra age allowances above the basic single personal and married couple's allowance are reduced by £1 for every £2 where total income is more than the age allowance threshold.

Children's tax credit is available to individuals with at least one child under 16. The allowance for 2002/03 is £5,290 (£10,490 in the year the child is born) and tax relief is at 10%. The allowance is reduced by £2 for every £3 of income taxable at the higher rate. For a couple living together, the reduction is by reference to the income of the partner with the higher total income.

Income is taxed under different schedules, eg Schedule E for employment income.