Uprating typo? 

Hi All,

Looking at the uprating regs, there seems to be a typo between the legislation and the explanatory note. Anyone know which is correct?

It’s: https://www.legislation.gov.uk/uksi/2024/247/made

Amendment of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002
4.—(1) The Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002(12) are amended as follows.

(2) In regulation 3 (manner in which amounts to be determined for the purposes of section 7(1)(a) of the Act)—

(a)in paragraph (2) for “£7,455” substitute “£7,955”; and
(b)in paragraph (3) for “£18,725” substitute “£19,995”.
(3)   In regulation 7(3) (determination of rate of working tax credit) in Step 4 for “£6,770” substitute ”£7,995”

Then:

Regulation 4 increases the income threshold (the level of household income below which the full award is granted) from £7,455 to £7,955 for working tax credit and from £18,725 to £19,995, for child tax credit. It also amends the formulae to calculate the rates of working tax credit and child tax credit to account for the increase in the income thresholds.

If you go into the original regs that are being amended - https://www.legislation.gov.uk/uksi/2002/2008 - it looks to me like they forgot to update the determination of rate of working tax credit and determination of rate of child tax credit in 2023 so the update is jumping two years this year - see step 4 of regs 7 and regs 8 (amendments F15 and F30 respectively, made in 2022, look like the most recent ones)

The 2023 amending regs - https://www.legislation.gov.uk/uksi/2023/237/regulation/4/made - just miss out those bits -

4.  Regulation 3 (manner in which amounts to be determined for the purposes of section 7(1)(a) of the Act) of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002(1) is amended as follows—

(a)in paragraph (2) for “£6,770” substitute “£7,455”; and
(b)in paragraph (3) for “£17,005” substitute “£18,725”.

I think you are right Daphne, but the issue is that if the threshold figure from reg 3(2) is now £7,955 then the figure used at step 4 of the calculation at reg 7(3) also needs to be £7,955 rather than £7,995.

Ah yes - I see what you mean - got drawn down the rabbit hole of the lack of change last year and missed that one :)

The regs, the explanatory notes and the EM are consistent on 7955 for the income threshold - the regs just change it to 7995 in the formula for the calculation which must be a mistake - assuming they didn’t make the mistake three times.

I’ll email the contact in the EM and update when I hear back

7955 looks to be the right level of increase (6.7%)

https://www.legislation.gov.uk/uksi/2024/510/contents/made

Updated our regs story for clarifiation - https://www.rightsnet.org.uk/welfare-rights/news/item/tax-credits-child-benefit-and-guardians-allowance-uprating-2024-2025 - thanks for spotting it Rebecca - I think it was the resulting email that brought about the change :)