Some important technical issues arise from the way in which schedule 2 amends the Income Tax Act 2007. They stem from the decision to add the definition of the higher rate limit or the new additional rate of tax to section 10 of the Act, rather than to section 20. Section 20 defines the starting rate and basic rate limits, which are not defined under section 10. I think that the Government are amending the wrong section of the 2007 Act.
For example, paragraph 9 of schedule 2 alters the definition of the basic rate limit under schedule 4 to the 2007 Act so that it now refers to section 10, even though the limit remains specified under section 20, not section 10. Paragraph 4 of the schedule tries to amend subsection (6) of section 10 of the 2007 Act whento judge from a copy of the 2007 Act that I printed from the website of the Office of Public Sector Informationthere is no subsection (6) of section 10. I should be grateful for clarification from the Government. In my copy of the Act, the section ends at subsection (5) not subsection (6), so I am confused about precisely what is being amended.
Paragraph 6 of schedule 2 adds the higher rate limit to the scope of section 414, but leaves the parenthesis referring to section 20 alone rather than including section 10, where it seems to be more appropriate. In other words, if schedule 2, which will amend the 2007 Act, is to have validity, it should refer to both sections 20 and 10. Those are important points, and it is necessary to have this slightly separate debate so that such matters do not get lost in the overall political discussion about the 50p tax rate. For the sake of tidiness, the Minister might want to consider specifying all the limits under one section because, at the moment, it seems that the parliamentary draftsman had a little change of heart and left a few loose ends in the important provision that amends the 2007 Act.