Tax Credits Act 2002 section 41

Annual review

Section 41 requires the Treasury to carry out an annual review of the key monetary amounts used in the tax credits system to check whether they have kept pace with inflation.

• The Treasury must review specified tax credit amounts every tax year to assess whether they have retained their value relative to UK price levels.
• The amounts subject to review include the income thresholds and taper rates used in the income test, the maximum rates of child tax credit and working tax credit (excluding the childcare element), and the prescribed rate used to calculate entitlement.
• The Treasury must prepare and publish a report on each review, including a statement showing what each amount would be if it had fully kept pace with prices.
• A copy of the report must be laid before both Houses of Parliament.

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