Part 1Income tax, corporation tax and capital gains tax

Foster carers etc

28Qualifying care relief: increase in individual’s limit

1

Chapter 2 of Part 7 of ITTOIA 2005 (qualifying care relief) is amended as follows.

2

In section 808 (the individual’s limit)—

a

in subsection (2), for “£10,000” substitute “£18,140”, and

b

omit subsection (3) (which confers a power to amend that amount).

3

In section 811 (the amount per adult or child)—

a

in subsection (1A) (weekly amount for adult), for “£250” substitute “£450”,

b

in subsection (2)(a) (weekly amount for children under 11 years old), for “£200” substitute “£375”,

c

in subsection (2)(b) (weekly amount for older children), for “£250” substitute “£450”, and

d

omit subsection (3) (which confers a power to amend those amounts).

4

After section 828 insert—

828AIndexation of the fixed amount and the amount per adult and child

1

This section provides for increases in the amounts specified in—

a

section 808(2) (the fixed amount), and

b

section 811(1A) and (2)(a) and (b) (the amount per adult or child),

if the consumer prices index for the September before the start of a tax year is higher than it was for the previous September.

2

The amount specified in section 808(2) for the tax year is found as follows—

  • Step 1: multiply the amount for the previous tax year by the same percentage as the percentage increase in the consumer prices index.

  • Step 2: if the result of Step 1 is a multiple of £10, it is the increase 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 and that amount is the increase for the tax year.

  • Step 3: add the increase for the tax year to the amount for the previous tax year and the result is the amount for the tax year.

3

The amounts specified in section 811(1A) and (2)(a) and (b) for the tax year are found as follows—

  • Step 1: multiply the amount for the previous tax year by the same percentage as the percentage increase in the consumer prices index.

  • Step 2: if the result of Step 1 is a multiple of £5, it is the increase for the tax year.

    If the result of Step 1 is not a multiple of £5, round it up to the nearest amount which is a multiple of £5 and that amount is the increase for the tax year.

  • Step 3: add the increase for the tax year to the amount for the previous tax year and the result is the amount for the tax year.

4

Before the start of the tax year the Treasury must make an order replacing the amounts specified in the provisions listed in subsection (1) with the amounts which, as a result of this section, are the amounts for the tax year.

5

In this section “consumer prices index” means the all items consumer prices index published by the Statistics Board.

5

In section 873(3) (orders made by Treasury etc not subject to negative resolution procedure), after paragraph (c) (but before the “or” at the end) insert—

ca

section 828A (qualifying care relief: indexation of amounts),

6

The amendments made by this section have effect for the tax year 2023-24 and subsequent tax years.