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The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2007 (SI 2007/1305) have been laid before Parliament and come into force with effect from 16 May 2007.

This statutory instrument amends the Tax Credits (Definition and Calculation of Income) Regulations 2002 (SI 2002/2006), to reflect that certain areas,previously covered by the Finance Act 1990 and ICTA 1988, are now covered by the Income Tax Act 2007.

The amendments to the 2002 regulations result from changes to other legislation that have an impact on them. In particular, they arise from the rewriting of certain income tax provisions regarding Gift Aid donations, relief for UK and overseas property losses, and certain changes to income tax law where an individual is treated as having income. These rewritten provisions are now contained in the Income Tax Act 2007.

When claiming the Child and Working Tax Credits, claimants generally have to report gross income of a full tax year (usually the previous year) from sources which are chargeable to income tax. This reflects the fact that the Child and Working Tax Credits are part of the tax system. Because the tax credit regulations refer to tax law definitions of various types of income, any relevant changes in tax law have to be reflected in the tax credit definition of “income”.

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Statutory Instrument 2007/1305