Part 3. Result & Effect
As there is no definition of Income in UK Legislation we have to apply the common usage of the word. We have to look deeper to understand what is actually being implied when UK associate terms such as PAYE. Many are led to believe wages/salary apply to Income Tax however we must understand the capacity we operate in (consciously/unconsciously) which will determine whether the state have the right to apply a tax on what we earn/gain. Income & Compensation are connected but not necessarily the same thing.
I have come to understand Income to mean: 'the financial gain you receive in exchange for labor, services or from investments'
Key Factor: Financial Gain
The wage/salary you receive from your employer is a means to make you whole for the loss incurred (time/energy), you have not received a gain in terms of increase/profit as this is an agreed equal exchange, but have obtained it through effort/work, in many cases can argue it is a lesser exchange regardless it is agreed upon and becomes (private) law between the parties.
Your employment contract obligates your employer to compensate you for your loss. As the contract is private/personal between the parties ONLY the parties have rights under and may enforce the contract. "Earn a living"
1. Private (Law/Capacity) >> Wages or Salary > Compensation > Subsistence >> Non Taxable
Private (Law/Capacity) >> Non Taxable (If you maintain this position)
However context is important. “Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax....The standard Personal Allowance is £11,500”
2. Public (Law/Capacity) >> Income (Earned/Unearned) > *Gain > Effort ¦ Work / Increase ¦ Profits > Earn-ings >> Taxable.
Public (Law/Capacity) >> Taxable. (Not a permanent position)
Key Factors: People in the UK (Residents) Personal Allowance, Income
In other words, being "resident in the United Kingdom", the state have the right to determine how much their members are allowed to personally earn before applying a tax, as they have agreed to subject themselves to the UK (public law) to fund government (revenue).