The Income Tax (Indexation) Order 1987
Section 24 of the Finance Act 1980 provides that the Treasury shall by order made by statutory instrument before 6th April 1987 specify the amounts which by virtue of that section shall, unless Parliament otherwise determines, be treated as specified for the year 1987—88. These are the thresholds for the higher rates of tax — the basic rate limit and the higher rate bands (section 32, Finance Act 1971, as amended by section 17 of, and Schedule 7 to, the Finance Act 1984 — abolition of investment income surcharge for 1984—85 and subsequent years of assessment) and the personal allowances (section 8, Income and Corporation Taxes Act 1970). These amounts are increased in accordance with the percentage increase in the retail prices index for December 1986 over that for December 1985. The “retail prices index” is defined in section 24(8) as “the general index of retail prices (for all items) published by the Department of Employment”.