SI 2020/343 – The Income Tax (Indexation) Order 2020

Released 25 March 2020

SI 2020/343 increases certain specified income tax allowances and limits for the tax year 2020–21.

The Income Tax (Indexation) Order 2020 fulfils the indexation requirement in the Income Tax Act 2007, s. 57, which provides that certain specified allowances and limits are increased by reference to the Consumer Prices Index.

These increases have effect for the 2020–21 tax year. The order does not provide for an increase of the amount of the personal allowance in s. 35(1). The personal allowance has already been set at £12,500 for the tax years 2019–20 and 2020–21 by the Finance Act 2019, s. 5(1) so the requirement to provide for indexation of that allowance for those tax years was disapplied by FA 2019, s. 5(5). The order specifies the following amounts for the tax year 2020–21:

the blind person’s allowance (ITA 2007, s. 38(1)(b)) – £2,500;

the tax reductions for married couples and civil partners: the minimum amount (ITA 2007, s. 43(c)) – £3,510;

the married couple’s allowance: marriages before 5 December 2005 (ITA 2007, s. 45(3)(a)(d)) – £9,075;

the married couple’s allowance: marriages and civil partnerships on or after 5 December 2005 (ITA 2007, s. 46(3)(a)(e)) – £9,075;

the married couple’s allowance: adjusted net income limit (ITA 2007, s. 45(4) and 46(4)(f)) – £30,200.

The order was made on 23 March 2020.

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