Finance Act, 1990

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Payments in respect of professional services.

26.—(1) As respects the year 1990-91 and subsequent years of assessment and as respects accounting periods ending on or after the 6th day of April, 1990, Chapter III of Part I of the Finance Act, 1987 , is hereby amended—

(a) in section 13, by the substitution of the following paragraph for paragraph (b) of subsection (2)—

“(b) in relation to a specified person, appropriate tax referable to—

(i) an accounting period,

(ii) a basis period for a year of assessment, or

(iii) a credit period within the meaning of section 18 (as amended by the Finance Act, 1990) for a year of assessment,

means the appropriate tax deducted from a relevant payment which is taken into account in computing the specified person's profits or gains for the said period and where there is more than one such relevant payment in the said period the aggregate of the appropriate tax deducted from such payments.”,

and

(b) in section 18—

(i) by the substitution, in subsections (2) and (4), of “credit” for “basis” where it occurs in those subsections, and

(ii) by the addition of the following subsection after subsection (4)—

“(5) In this section—

‘credit period for a year of assessment’ means, in relation to a specified person—

(a) as respects the year of assessment 1990-91, the basis period which would otherwise have been the basis period for that year of assessment but for the provisions of sections 14 and 15 of the Finance Act, 1990,

(b) as respects any subsequent year of assessment, the basis period for the year of assessment immediately preceding the year of assessment, or

(c) notwithstanding paragraph (a) or (b), as respects a year of assessment which is a discontinuance period, the year of assessment:

Provided that where there is an interval between the end of the credit period for one year of assessment and the credit period for the next year of assessment, then, the interval shall be deemed to be part of the second credit period;

‘discontinuance period’ means the year of assessment in which a source of income, profits or gains is permanently discontinued (or is to be treated as permanently discontinued by virtue of section 59 or 71 of the Income Tax Act, 1967 ) and in relation to which a relevant payment is to be taken into account in a computation of the income, profits or gains of that source for that year of assessment.”,

and the said subsections (2) and (4), as so amended, are set out in the Table to this subsection.

TABLE

(2) Where, in relation to a year of assessment, a specified person is within the charge to income tax and has borne appropriate tax referable to the credit period for that year of assessment he may, subject to the provisions of section 21, claim to have the amount of appropriate tax specified in subsection (4) set against the income tax chargeable for that year of assessment and, where such appropriate tax exceeds such income tax, to have the excess refunded to him.

(4) The amount of the appropriate tax to be set against corporation tax for an accounting period or income tax for a year of assessment in accordance with subsection (1) or (2) shall be the total of the appropriate tax referable to the accounting period or to the credit period for the year of assessment, as the case may be, which is included in the forms furnished in accordance with subsection (3) and not repaid under any of the provisions of this Chapter.

(2) Where a specified person is within the charge to income tax for the year of assessment 1990-91, section 19 of the Finance Act, 1987 , shall apply as respects the first-mentioned period (being the first-mentioned period within the meaning assigned to it by subsection (1) of that section) which is the basis period for the year of assessment 1990-91 as if, in subsection (2) of that section 19, the reference to the basis period for the year of assessment immediately preceding the first-mentioned period were a reference to the basis period for the year of assessment 1989-90.

(3) (a) This section shall not apply in relation to a specified person where the year 1990-91 is a discontinuance period (within the meaning assigned to it by section 18 (5), inserted by this Act, of the Finance Act, 1987 ) as respects that person.

(b) This subsection shall be construed together with Chapter III of Part I of the Finance Act, 1987 (as amended by this Act).