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'(1) After section 257AA(2) of the [...]axes Act 1988 (which specifies the amount by reference to whic[...] the children's tax credit is calculated) insert—
(2AA) for a year of assessment during the whole or part of which is qualifying child under five years of age (or more than one) is resident with the claimant, subsection (2) above has effect as if the amount specified there were increased by £200.
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(2) After subsection (3) of that section (reduction of amount where claimant has income within the higher rate band) insert:
(3AA) Where subsection 12AA) above applies, the reference in subsection (3) above to the amount specified in subsection (2) above is to the higher amount applicable by virtue of subsection (2AA) above.".
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(3) After subsection (4) of that section (meaning of "qualifying child") insert:
(4AA) In this section 'qualifying child under five years of age', in relation to a year of assessment, means a qualifying child less than five years of age at the beginning of that tax year.".
§ (4) In section 257C(1) and (3) of the Taxes Act 1988 (indexation) for "257AA(2)" substitute "257AA(2) and (2A) and (2AA)".
§ (5) Schedule 13B to the Taxes Act 1988 (children's tax credit: Provisions applicable where child lives with more than one adult in a year of assessment) is amended in accordance with Schedule 11A to this Act.
§ (6) Subsections (1) to (3) and (5) above have effect for the year 2003–04 and subsequent years of assessment.
166§ (7) Subsection (4) above has effect for the purposes of the application of section 257AA of the Taxes Act 1988 for the year 2004–05 and subsequent years of assessment.'.—[Mr. Ottaway.]
§ Brought up, and read the First time.
§ Mr. Richard Ottaway (Croydon, South)I beg to move, That the clause be read a Second time.
§ Mr. Deputy Speaker (Mr. Michael Lord)With this it will be convenient to discuss new schedule 1— `Children's Tax Credit: Children under five years of age: supplementary—