The Income Tax (Indexation) Order 1988
Section 24(4) and (5) of the Finance Act 1980 provide that the Treasury shall by order made by statutory instrument before 6th April 1988 specify the amounts which by virtue of that section shall, unless Parliament otherwise determines, be treated as specified for the year 1988—89. These are the thresholds for the higher rates of tax — the basic rate limit and the higher rate bands (section 32, Finance Act 1971), and the personal allowances (section 8, Income and Corporation Taxes Act 1970) respectively. These amounts are increased in accordance with the percentage increase (3.7%) in the retail prices index for December 1987 over that for December 1986. Certain of the amounts have been rounded to the nearest £100 in accordance with section 24(4) and (5)(a) and, in the case of the other amounts, the increases have been rounded to the nearest £10 in accordance with section 24(5)(b).