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Unemployed Persons (Revenue Loss)

Volume 886: debated on Thursday 13 February 1975

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asked the Chancellor of the Exchequer if he can estimate the annual cost of tax unpaid of 500,000, 750,000 and 1 million unemployed.

Unemployment has implications for the level of receipts of many kinds of tax, there are serious difficulties in estimating the overall effects on revenue. So far as income tax is concerned, the tax which would have been paid by 500,000, 750,000, and 1 million persons—on the basis that they all received earnings for the full tax year at the October 1974 average weekly rate, and were liable to tax at the average annual rate for that level of income—is about £210 million, £315 million, and £410 million, respectively. But these figures cannot be taken as representing the total cost to the economy in terms of lost revenue of these levels of unemployment.