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Taxation

Volume 973: debated on Wednesday 14 November 1979

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asked the Chancellor of the Exchequer if he will update the information sent to the hon. Member for Birmingham, Perry Barr following the answers given in the Official Report, 3 August 1978, c. 625, on income tax and national insurance deductions.

[pursuant to his reply, 9 November 1979, c. 362–63]: The percentages of income taken in tax and national insurance for wage earners on a. 25 per cent. average earnings, b. 50 per cent. average earnings, c. average earnings, d. twice average earnings, e. five times average earnings, f. 10 times average earnings, (1) assuming that they were receiving the following reliefs: mortgage tax relief on a mortgage of three times annual salary and superannuation at 5 per cent. of annual salary and (2) assuming that they were receiving no reliefs other than personal allowances, are as follows:

1979–80(1) Per cent.(2) Per cent.
25 per cent. of average earnings4·94·9
50 per cent. of average earnings5·610·1
Average earnings12·123·2
Two times average earnings17·927·6
Five times average earnings30·239·0
Ten times average earnings42·949·3
The assumed level of average earnings for 1979–80 has been obtained by updating to July 1979 the new earnings survey estimate of average earnings of full-time adult male manual workers in April 1979 taking account of movements in a centred three-month moving average of the whole economy index of average earnings of all employees.National insurance contributions are at the not contracted out rate. Mortgage interest relief is calculated on the assumption that the interest is payable on a loan for the full amount specified, subject to the restriction to £25,000.The method of giving relief on life policies was changed from 1979–80, and accordingly such relief has not been taken into account in these figures, though it was in the figures for earlier years sent to the hon. Member.