The  Income Tax  is  a progressive tax equivalent of personal income tax ( IRPEF ) provided for by Italian law.

The taxable persons of the  Income Tax  are natural persons resident and not resident in the territory of the United Kingdom.

The assumption or fact generating of the Income Tax is represented by the possession of income included in the following categories:

• Rental income;
• Employee income;
• Business income;
• Income from self-employment;
• Investment income.

The  Income Tax  applies to the total income of resident and non-resident natural persons in the territory of the United Kingdom.

The total income of natural persons is made up of the sum of the single income categories (above) that contribute to forming it.

The principle of global income taxation applies to the total income of resident natural persons, ie the income produced everywhere (the principle of  world wide taxation ), by virtue of which the natural persons residing in the United Kingdom must also declare the income produced to the British tax authorities in other countries, similar to what happens in Italy with regard to the taxation of income produced abroad by residents.

Non-residents, on the other hand, apply the principle of territoriality according to which only the income produced therein are attracted to taxation in the United Kingdom.

The Income Tax is a personal tax that takes into account situations related to the personal sphere of the tax payer. In fact, there are exemptions related to the age of the tax payer, his marital status or situations of physical impairment; there are also numerous deductions to be used in certain cases (by way of example, for the payment of pension contributions, charitable donations, maintenance grants, expenses linked to the employee’s status, etc.).

Like the IRPEF, the Income tax is also determined by applying the income tax rates to the total income.

In Great Britain, the following income brackets are currently available:

• 20% from £ 0 to £ 45,000 (Basic Rate) *
• 40% from £ 45.001 to £ 150,000 (Higher Rate)
• 45% from £ 150.001 (Additional Rate)

* £ 11,500 (Personal Allowance), if annual income does not exceed £ 123,000.

The Personal Allowance is a tax exempt income to be considered tax-free which plays an important role in the correct determination of the tax payable.

In Great Britain there is not, and therefore does not apply, the concept of family unit. It follows that every subject, even if belonging to the same family, is considered as an independent tax subject and is therefore taxed autonomously.

In the United Kingdom, unlike Italy, the tax period for natural persons is from 6 April to 5 April of the following year.

The collection of the tax in the United Kingdom can take place in the following two ways:

• Self-declaration to declare income from self-employment;
• Pay as you earn (PAYE) with regard to income from employment; in this case, just as happens in Italy, the employer acts as a substitute tax and then makes the withholding tax and pays it to the Central Government. This implies that most taxpayers who earn income are not subject to the obligation to submit the annual income tax return since the taxation at source was applied.