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One-Parent Families (Tax Reliefs)

Volume 932: debated on Monday 16 May 1977

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asked the Chancellor of the Exchequer (1) when he expects the extra additional personal allowance announced in the Budget for one-parent families to be reflected in their tax codes and to be paid to them;(2) why the full extra tax relief announced in the Budget is being delayed for lone parents during the present period when for other taxpayers relief is being incorporated in tax codes and will be reflected in pay packets on the first payday after 17th May;(3) whether he will investigate coding lone parents with an "H" or a special suffix so that extra tax relief can be paid to them as quickly as to other taxpayers;(4) whether there was a delay in increasing additional personal allowances for one-parent families last year or in previous years.

, pursuant to his reply [Official Report, 11th May 1977], gave the following information:Tax offices will be sending out notices of amended PAYE codes taking into account the increase in the additional personal allowance to employees and their employers on the 27th May. Employers should therefore be able to use the new codes not later than the first pay day after 31st May.Tax offices do not usually have to recalculate codes and issue individual coding notices to take account of increases in the single, married and wife's earnings allowances or the single and married age allowances. Codes which contain these allowances normally end with "H" (married), "L" (single or wife's earnings), "P" (single age) or "V" (married age) and employers are instructed to amend employees' codes ending with these letters to give effect to the increases. But effect can only be given to an increase in the additional personal allowance through the recalculation of codes by tax offices and the issue of individual notices. Since these codes generally contain the single allowance most of them end with "L" and care has to be taken that the amended codes, which will also reflect the increase in the single allowance, are not increased a second time by employers. A gap of about two weeks is therefore left between the date from which employers are instructed to increase codes ending in "L"—18th May—and the date from which employers are expected to be able to use the codes containing the increased additional personal allowances—1st June.This procedure has been adopted ever since the code system using suffix letters was introduced in 1973–74. In 1976 and 1975 the gap was nearer three weeks than two so the amended codes should be operated a little more quickly this year.The practicability of allocating suffix "H" to codes containing the additional personal allowance has been under consideration for some time and while no firm decisions have been taken it is probable that this will be done from 1978–79. It should then be possible to give effect to increases in this allowance for nearly all concerned as quickly as increases in the other allowances and without the need for tax office action in each individual case.