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Income Tax

Volume 894: debated on Monday 23 June 1975

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asked the Chancellor of the Exchequer how many heads of household will be brought into the tax bracket as a result of the proposed abolition of the child tax allowances.

I assume that the hon. Member has in mind the child benefit scheme. This is due to start in 1977, and it is not possible to estimate the number of families who will be brought into tax in consequence of it as this will depend on any changes in incomes, tax allowances, family allowance and tax rates in the interim period. However, if taxable family allowances, the family allowance deduction and child tax allowances had all been abolished in 1975–76, the additional number of taxpayers would have been about 190,000.

asked the Chancellor of the Exchequer how many people in Northern Ireland are estimated to be excused paying income tax because of low income during the financial year 1974–75; and how this compares with England, Scotland and Wales.

asked the Chancellor of the Exchequer what is the maximum rate of direct taxation in the United Kingdom; and from information available from international sources, how this compares with the equivalent rates in other EEC countries.

The maximum rate of income tax in the United Kingdom is 98 per cent. I understand that the top income tax rates in other EEC countries are currently as follows:

Belgium72(75.6)*
Denmark39·6(602)†
France60
Germany56
Ireland70
Italy82
Netherlands71
Luxembourg57
* Including local surchage on income tax.
† Including local income tax (Copenhagen).

asked the Chancellor of the Exchequer if he will now publish in the Official Report the amount of an increase in annual wages from £2,700 to £2,800 which would be taken in direct taxation in West Germany, Belgium, France, Holland, Italy, and the United Kingdom, respectively, ignoring social security contributions, and at mid-May 1975 rates of exchange.

The additional national income tax payable in the circumstances described would be as follows:

£
Germany22
Belgium18
France4
Holland23
Italy15
United Kingdom (proposed for 1975–75)35
These amounts take no account of employee's social security contributions, which are higher in all the other countries specified than in the United Kingdom. Rates of exchange at mid-May have been used.