Introduction Background Note
4.An individual is entitled to a personal allowance for income tax.  The amount depends upon the individual’s age and income.
5.Income tax personal allowances are subject to indexation (an annual increase based upon the percentage increase to the retail prices index).  Parliament can over-ride indexed amounts by a provision in the Finance Act.
6.The table below sets out the amount of the personal allowance for those aged under 65 for 2011-12, the indexed amount for 2012-13 and the amount specified by this section for 2012-13:
7.The effect of this section is to over-ride the indexed amount for the personal allowance for those aged under 65.  This section is part of a package of measures together, with a further section in this Act, that sets the basic rate limit in an amount below indexation.