The Income Tax (Indexation) (No. 2) Order 1998

Explanatory Note

(This note is not part of the Order)

Section 257C(3) of the Income and Corporation Taxes Act 1988 (“the Act”) operates to provide that the Treasury shall by order made by statutory instrument before 6th April 1999 specify the amount which by virtue of that section shall, unless Parliament otherwise determines, be treated as specified for the purpose of section 257(1) of the Act (personal allowance for persons under 65) for the year of assessment 1999–00. This Order specifies that amount as £4,335.

Following the amendments to section 257C(1) of the Act made by section 107(1) and (3) of the Finance Act 1993, the amount specified by the Income Tax (Indexation) Order 1998 (S.I. 1998/755) for the year of assessment 1998–99 for the purpose of section 257(1) of the Act is increased by this Order in accordance with the percentage increase in the retail prices index for September 1998 over that for September 1997. The increase has been rounded up to the nearest £10 in accordance with section 257C(1)(b) of the Act.

The “retail prices index” is defined in section 833(2) of the Act, as amended by paragraph 22 of Schedule 2 to the Transfer of Functions (Registration and Statistics) Order 1996 (S.I. 1996/273), as the “general index of retail prices (for all items) published by the Office for National Statistics”. The retail prices index for September 1997 is 159.3 and for September 1998 164.4 (based on January 1987 as 100).