Schedule B: PROFITS DERIVED FROM THE OCCUPATION OF LAND AND HOUSE PROPERTY WHERE USED AS A FARM.—The occupier of such property is liable to the payment of tax on one-third of the full amount of rent (or annual value, if occupied by the owner) and tithe. Where the owner occupies the premises himself, he must pay this tax in addition to that payable by him in respect to his ownership thereof. Persons thus engaged in farming may, if they prefer it, be assessed on their actual profits (under Schedule D), but the present form of assessment is distinctly preferable. For inasmuch as the profits are to be taken in all cases as equivalent to one-third of the annual value of the farm, persons thus assessed are relieved from payment of tax on any profits which may exceed that limit, while if the profits are found to have been below that amount, they can recover the tax paid on such sum as represents the difference between the actual profits and the one-third of the annual value of the premises.
Schedule C: PUBLIC ANNUITIES PAYABLE OUT OF GOVERNMENT FUNDS.—Annuities, however, which are so payable by friendly societies (legally established, and assuring for not more than £200, or paying annuities not exceeding £30), or by savings banks, or by charitable institutions, are exempt. There are also other exemptions of special kinds, which it is unnecessary to deal with for present purposes.
Schedule D (i.): PROFITS OF TRADE, PROFESSION, EMPLOYMENT OR VOCATION.—The tax extends to the profit of all trades, etc., carried on in the United Kingdom by any person, whether a British subject or not, and wheresoever residing; and also to the profit of trades, etc., carried on elsewhere than in the United Kingdom, if carried on by persons residing therein. It is to be observed that the amount of income to be returned for assessment in any given year is neither the actual income of that year, nor the income which a person expects to make in that year, but is a "statutory" income of which the amount is to be computed from ascertained figures. These are the figures shown by the accounts of the business or profession for the three years immediately preceding, ending either on April 5 or on the date prior thereto to which the annual accounts have been usually made up, and the amount of profit is to be computed on an average of such preceding three years. If the trade, etc., has been set up within three years, the profit must be taken on an average from the period of commencement; and if only commenced within the year of assessment, to the best of the knowledge and belief of the person making the return, who must state the grounds upon which the estimate has been made.
Profits: Deductions allowed in assessment of.—Repairs of premises, and the supply or repair of implements, utensils or articles employed, not exceeding the sum usually expended according to the average of the three preceding years; debts proved to be bad; and doubtful debts, according to their estimated value; the rent or if the premises be occupied by the owner, the annual value according to the amount on which duty has been paid under Schedule A—of premises used solely for the purpose of business and not as a place of residence; a proportion, not exceeding two-thirds, of the rent or annual value of any dwelling-house partly used for the purposes of business.
Any other disbursements or expenses wholly and exclusively laid out for the purposes of trade, etc., such as wages of employees, insurance premiums, payments for water and lighting, rates and taxes.
Where the profits are earned by letting a furnished house or apartments, a proportion only of the necessary deductions can be made if part only of the premises be used for letting. And where the business or practice of letting is confined to a portion of the year, the deductions must be proportionate to such period. If, however, the premises be taken solely for the purpose of letting, the deductions may be made in full, irrespective of the actual period the owner or tenant may have succeeded in letting them.
