Section 21 Indexation of the [basic rate limit and starting rate limit for savings]
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Amendments
Heading words substituted for the words “starting rate limit and the basic rate limit” by Finance Act 2008 section 5 and Schedule 1 para 11(6) for 2008-09 and later tax years.
(1) This section applies if the retail prices index for the September before the start of a tax year is higher than it was for the previous September.
(2) ...
Amendments
Subs (2) omitted by Finance Act 2008 section 5 and Schedule 1 para 11(2) for 2008-09 and later tax years.
(3) The basic rate limit for the tax year is the amount found as follows.
Step 1
Increase the basic rate limit for the previous tax year by the same percentage as the percentage increase in the retail prices index.
Step 2
If the result of Step 1 is a multiple of £100, it is the basic rate limit for the tax year.
If the result of Step 1 is not a multiple of £100, round it up to the nearest amount which is a multiple of £100.
That amount is the basic rate limit for the tax year.
(3A) The starting rate limit for savings for the tax year is the amount found as follows.
Step 1
Increase the starting rate limit for savings for the previous tax year by the same percentage as the percentage increase in the retail prices index.
Step 2
If the result of Step 1 is a multiple of £10, it is the starting rate limit for savings for the tax year.
If the result of Step 1 is not a multiple of £10, round it up to the nearest amount which is a multiple of £10.
That amount is the starting rate limit for savings for the tax year.
Amendments
Subs (3A) inserted by Finance Act 2008 section 5 and Schedule 1 para 11(3) for 2008-09 and later tax years.
(4) Subsections [(3) and (3A)]1 do not require a change to be made in the amounts deductible or repayable under PAYE regulations during the period beginning on 6 April and ending on 17 May in the tax year.
Amendments
1 Substituted for “(2) and (3)” by Finance Act 2008 section 5 and Schedule 1 para 11(4) for 2008-09 and later tax years.
(5) Before the start of the tax year the Treasury must make an order replacing the amounts specified in sections [10 and 12]1 with the amounts which, as a result of subsections [(3) and (3A)]2, are the [basic rate limit and starting rate limit for savings]3 for the tax year.
Amendments
1 Substituted for “section 20” by Finance Act 2008 section 5 and Schedule 1 para 11(5)(a) for 2008-09 and later tax years.
2 Substituted for “(2) and (3)” by Finance Act 2008 section 5 and Schedule 1 para 11(5)(b) for 2008-09 and later tax years.
3 Substituted for the words “starting rate limit and the basic rate limit” by Finance Act 2008 section 5 and Schedule 1 para 11(5)(c) for 2008-09 and later tax years.
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