EXPLANATORY NOTE
(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—
e
review the amounts referred to in subsection (2) of that section;
f
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
g
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 2010-11 was laid before Parliament on 15 February 2011 and published.
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. These amounts were last amended by the Tax Credits Up-rating Regulations 2010 (S.I. 2010/981).
Regulation 2 amends the Child Tax Credit Regulations 2002 (S.I. 2002/2007). Regulation 7(3) is substituted so that the family element of child tax credit is £545 in all cases. Regulation 7(4) is amended so as to increase the maximum rate of the individual elements of child tax credit.
Regulation 3 amends the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (S.I. 2002/2005). Regulation 20(2) is amended so as to reduce the childcare element from 80 per cent to 70 per cent of childcare costs and the Table in Schedule 2 (prescribing the maximum rates for the elements of working tax credit other than the child care element) is substituted.
Regulation 4 amends the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002 (S.I. 2002/2008). Regulation 3(3) is amended so as to increase the first income threshold for those entitled to child tax credit. Regulations 5 (amounts prescribed for section 7(3)(a) and (b) of the Tax Credits Act 2002), 7(3) (determination of rate of working tax credit) and 8(3) (determination of rate of working tax credit) are also amended.
A full Impact Assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.