Commentary on Sections Glossary Part 2: Employment income: charge to tax Section 16: Meaning of earnings “for” a tax year
71.This section explains what is meant by earnings “for” a tax year. It is a new section in response to requests made during the consultation leading up to this Act which suggested that it would be a good idea to have this kind of clarification about what earnings are “for” a tax year. See Note 6 in Annex 2.
72.Subsection (2) identifies the period that the earnings are “for”, and subsections (3) and (4) explain how to work out the tax year that the earnings are “for” on the basis of the period determined in subsection (2). If the period spans more than one tax year then the earnings for that period should be apportioned between those years on a just and reasonable basis.
73.Some of the provisions in Part 3 that operate to treat income as earnings specify the year “for” which the income should be so treated. Subsection (5) makes it clear that section 16 does not displace the effect of those provisions in Part 3.