beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

Employment income: basis of assessment for general earnings: introduction

Chapters 4 and 5 of Part 2 ITEPA 2003

There are two stages to finding out whether, and when, general earnings from an office or employment are chargeable to income tax. For details of what is included in general earnings, see EIM00511.

The first step is to decide if the earnings are taxable at all. This depends on:

  • the year that the earnings are for and
  • whether the employee or office holder was resident and domiciled in the United Kingdom in that year (see EIM40002).

The second step is to decide the year in which the earnings are to be charged to tax. This is usually the year in which they are received (see EIM42260 onwards).The basis of assessment is therefore commonly referred to as the “receipts basis”.

Note that the year when the earnings are received is not necessarily the same as the year that they are for. The year that earnings are for determines whether the earnings are taxable at all. If they are taxable, the year that they are received determines when they are charged to tax. See example EIM42202.

If you are dealing with an employee or office holder who has at all times been resident and domiciled in the United Kingdom, see EIM42206.

In all other cases, see EIM42207.

See also the table of contents at EIM42200.