Statutory Instruments
SOCIAL SECURITY
Made
10th March 2005
Coming into force
6th April 2005
As a result of carrying out in the tax year 2004-05 a review of the amounts specified in section 41(2) of the Tax Credits Act 2002(1) (“the Act”)and in accordance with section 41(1) of the Act, the Treasury have determined that Regulations should be made prescribing increases in some of those sums.
A draft of these Regulations was laid before Parliament in accordance with section 66(1) and (2)(a) of the Act and approved by resolution of each House of Parliament.
Accordingly the Treasury in exercise of the powers conferred upon them by sections 7(1)(a), 9, 11, 13 and 65(1) of the Act, make the following Regulations:
1.—(1) These Regulations may be cited as the Tax Credits Up-rating Regulations 2005 and shall come into force on 6th April 2005.
(2) In these Regulations
“the Child Tax Credit Regulations” means the Child Tax Credit Regulations 2002(2)
“the Entitlement Regulations” means the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002(3)
“the Income Thresholds Regulations” means the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002(4)
(3) These Regulations have effect in relation to awards of tax credits for the tax year beginning on 6th April 2005 and subsequent tax years.
2.—(1) The Child Tax Credit Regulations are amended as follows.
(2) In regulation 7(4) (individual element)—
(a)in sub-paragraph (a) for “£3,840” substitute “£3,975”;
(b)in sub-paragraph (b) for “£4,730” substitute”£4,895”;
(c)in sub-paragraph (c) for “£1,625” substitute “£1,690”;
(d)in sub-paragraph (d) for “£3,840” substitute “£3,975”;
(e)in sub-paragraph (e) for “£4,730” substitute “£4,895”;
(f)in sub-paragraph (f) for “£1,625” substitute “£1,690”.
3.—(1) In regulation 20(3) of the Entitlement Regulations(maximum rate of the child care element of a working tax credit)—
(a)in sub-paragraph (a) for “£135” substitute “£175”.
(b)in sub-paragraph (b) for “£200” substitute “£300”.
(2) For the Table in Schedule 2 to the Entitlement Regulations substitute the Table set out in the Schedule to these Regulations.
4.—(1) In regulation 3(2) of the Income Thresholds Regulations (first income threshold for those entitled to working tax credit) for “£5,060” substitute “£5,220”.
(2) In regulation 3(3) of the Income Thresholds Regulations (first income threshold for those entitled to child tax credit) for “£13,480” substitute “£13,910”.
(3) In regulation 7(3) (determination of rate of working tax credit) for “£5,060” (threshold amount shown at step 4) substitute “£5,220”.
(4) In regulation 8(3) (determination of child tax credit) for “£13,230” (threshold amount shown at step 4) substitute “£13,910”.
Joan Ryan
Nick Ainger
Two of the Lords Commissioners of Her Majesty’s Treasury
10th March 2005
Regulation 3
| Relevant element of working tax credit | Maximum annual rate |
|---|---|
1. Basic element | £1,620 |
2. Disability element | £2,165 |
3. 30 hour element | £660 |
4. Second adult element | £1,595 |
5. Lone parent element | £1,595 |
6. Severe disability element | £920 |
7. 50 plus element— | |
(a)in the case of a person who normally undertakes qualifying remunerative work for at least 16 hours, but less than 30 hours, per week | £1,110 |
(b)in the case of a person who normally undertakes qualifying remunerative work for at least 30 hours per week | £1,660 |
(This note is not part of the Regulations)
Section 41 of the Tax Credits Act 2002 (c. 21) requires the Treasury, in each tax year to—
(a)review the amounts referred to in subsection (2) of that section,
(b)prepare a report of each review; including a statement of what each of the amounts would be if it had fully retained its value; and
(c)publish the report and lay a copy of it before each House of Parliament.
The Treasury’s report of the review in respect of the tax year 2004-05 was published and laid before Parliament on [date].
In consequence of the review the Treasury have made these Regulations, prescribing increases in certain of the sums required to be reviewed under section 41.
Regulation 1 provides for the citation, commencement and effect of these Regulations, and defines some terms used in them.
Regulation 2 amends regulation 7(4) of the Child Tax Credit Regulations 2002 (S.I. 2002/2007), increasing the maximum rate of the elements of a child tax credit.
Regulation 3 and the Schedule amend Schedule 2 to the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (S.I. 2002/2005) by substituting a new Table prescribing the maximum rates for the elements of working tax credit other than the child care element.
Regulation 4 increases the first income thresholds for those entitled to working tax credit and child tax credit in regulations 3(2), (3) of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002 (S.I. 2002/2008) and the threshold amount shown at step 4 in regulation 7(3) and step 4 in regulation 8(3) of the above mentioned regulations.
These Regulations impose no new costs on business.