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Income tax and corporation tax are annual taxes which must be imposed by Parliament for each tax year or financial year respectively. This is normally done by the annual Finance Act fixing the rates of income tax for the current year and the main rate of corporation tax for the next year.

In anticipation of its re-imposition, the income tax machinery is kept in operation by ICTA 1988, s 820, which provides for the carrying forward into each new tax year all provisions contained in the Income Tax Acts which were in force on the last day of the preceding year. This provision does not itself authorise the payment or deduction of tax but ensures administrative continuity.

When an Act is passed providing that income tax shall be charged, the Income Tax Acts have effect¹.

The Income Tax Acts are defined as all enactments relating to income tax, including any provisions of the Corporation Tax Acts which relate to income tax². These include the Income Tax (Earnings