Commentary on Sections Overview Overview Section 902: Meaning of “applicable rate” in section 901
2737.This section defines “applicable rate” in section 901. It is based on section 4 of ICTA.
2738.Payments within section 900 are all subject to deduction at the basic rate. Deductions from annual payments made by persons other than individuals are also normally at the basic rate. The only exceptions, where the savings rate applies instead, are certain payments under purchased life annuities, namely those charged to tax under Chapter 7 of Part 4 of ITTOIA.
2739.Subsection (4)(b), which is based on section 4(1A) of ICTA, caters, for example, for the case where the recipient is a company within the charge to corporation tax.
2740.This section is subject to provisions requiring or permitting deduction at special rates - see Chapter 8 of this Part. It is also subject to regulation 3 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488) which provides for a different rate of tax to be deducted from a gross payment if a notice under regulation 2(2) has been given.
2741.In all cases, the rate is determined by the year in which the payment is made. See Change 138 in Annex 1 and the commentary on section 900.