Finance Bill 2002: EXPLANATORY NOTE
CLAUSE 28: PERSONAL ALLOWANCE FOR 2003-04 FOR THOSE AGED UNDER 65
SUMMARY
1. This clause sets the personal allowance for those aged under 65 at £4615 for the year 2003-04. (REV 1)
DETAILS OF CLAUSE
2. Subsection (1) sets the amount specified in section 257(1) of the Taxes Act 1988 (the personal allowance for those aged under 65) at £4615 for the year 2003-04.
3. Subsection (2) disapplies statutory indexation (section 257C(1) of ICTA 1988), which would otherwise have increased the personal allowance for those under the age of 65 in line with the increase in the Retail Prices Index in the year to September 2002.
BACKGROUND
4. The personal allowance for the under 65's is the amount of earnings an individual can have before they need to pay tax on those earnings. This clause freezes the personal allowance at £4,615 in 2003-04 so that it remains at the same level as in 2002-03.
5. Unless Parliament otherwise determines, section 257C(1) of the Taxes Act 1988 increases certain allowances in line with the increase in the Retail Prices Index in the year to September. Consequently this clause overrides indexation in relation to the personal allowance for the under 65's for the year 2003-04.