Finance Leasing Manual - FLM20.05

Schedule A: scope

Although not explicitly stated anywhere in the Schedule A legislation, the basic Section 15 ICTA 1988 Schedule A charge is a charge on income and not on capital gains. This derives from London County Council v A-G, 4 TC 265, at page 293 where Lord Macnaghten said:

'Income Tax, if I may be pardoned for saying so, is a tax on income. It is not meant to be a tax on anything else. It is one tax, not a collection of taxes essentially distinct. There is no difference in kind between the duties of Income Tax assessed under Schedule D and those assessed under Schedule A or any of the other schedules of charge. One man has fixed property another lives by his wits, each contribute to the tax if his income is above the prescribed limit. The standard of assessment varies according to the nature of the source from which taxable income is derived. That is all.'