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Earnings And Income Tax

Volume 645: debated on Monday 24 July 1961

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asked the Chancellor of the Exchequer if he will state the average earnings in 1939 plus 25 per cent., and what was the Income Tax which a married man paid on this sum; and if he will state the average earnings now plus 25 per cent., the taxable amount of this, and the average rate of tax per £ on this taxable amount.

There was no earnings inquiry in 1939. The nearest earnings inquiries were made in October, 1938, and July, 1940, which gave £3 9s. and £4 9s. for the average weekly earnings of males over 21 in all industries. If the increase between these two dates took place evenly over the period the figure for October, 1939, would have been £4 1s. and a 25 per cent. increase gives £5 1s. 3d. or £263 a year; the Income Tax for a married man on this would have been 1s. 4d. a week.The latest available comparable figure is £14 10s. 8d. in October, 1960, and a 25 per cent. increase gives £18 3s. 4d. or £945 a year. After deducting the allowances for earned income for a married person and for National Insurance contributions this gives a taxable income of £477 on which the Income Tax is £129 6s. 9d. or an average rate of tax per £ of 5s. 5d.