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Personal Incomes

Volume 976: debated on Friday 21 December 1979

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asked the Chancellor of the Exchequer if he will express the changes in money and real terms of the tax-free income of (a) single person, (b) married couple, (c) married couple plus one child, (d) married couple plus two children and (e) married couple plus four children each year since 1974 taking 1974 to equal 100.

The figures are as in the following table.The price index used is the General Index of Retail Prices (all items), aver aged over the financial years shown, except for 1979–80 where the index for October (the middle of the year) has been used.

Tax Thresholds

1974–75=100

Single

Married

Married 1 child aged under 11

Married 2 children aged under 11

Married 4 children: 2 aged under 11, 211–16

Year

Money terms

At 1974–75 prices

Money terms

At 1974–75 prices

Money terms

At 1974–75 prices

Money terms

At 1974–75 prices

Money terms

At 1974–75 prices

1974–75100100100100100100100100100100
1975–761088711089108871078610584
1976–771188212587125871268812688
1977–7815192168103154941519214588
1978–7915889177100160901558714682
1979–8018690210101183881738315273
The thresholds represent the amount of income—including family allowances and tax-free child benefit—that can be received before tax is payable. The figures take account of the family allowance deduction—"clawback"—where appropriate.

asked the Chancellor of the Exchequer, for a married man with two children aged 12 and 9 years, what is his net income, given a gross annual salary of, respectively, £3,000, £5,000, £8,000, £12,000, £17,000 and £25,000, first after taking account of personal tax reliefs, and, secondly, after also taking account of non-personal reliefs which are approximately average for his gross income level.

[pursuant to his reply, 17 December 1979, c. 58]: The figures are as follows:

Net incomes (including child benefit)
Gross annual salaryTaking account of personal allowancesTaking account of all allowances
££
£3,0002,9033,115
£5,0004,1734,446
£8,0006,1426,494
£12,0008,9239,448
£17,00011,75512,817
£25,00015,59517,335
Net income is gross salary plus child benefit minus tax and national insurance at the not-contracted-out rate.In the second column of net income it is assumed that the man qualifies for mortgage interest relief and for relief on superannuation contributions. The figures therefore take account of an estimate of average mortgage interest relief in 1979–80 and superannuation contributions of 5 per cent. of salary, in addition to the married allowance. The estimate of mortgage interest relief is based on the average around the income levels shown for all married couples claiming mortgage interest relief.