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Tax Break-Even Points

Volume 31: debated on Friday 12 November 1982

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asked the Chancellor of the Exchequer if he will update the figures on tax break-even points provided in his reply of 30 March to the hon. Member for Wolwich, West, Official Report, c.100–1, in the light of the latest information on earnings levels.

The information, including small revisions to some of the index numbers for 1981–82, is as follows:

Tax year
1981–821982–83
Single Person
Threshold at current prices£1,375£1,565
Threshold at 1949–50 prices (index) 1949–50=100108·2115·1
Threshold as percentage of average manual earnings:20·6 per cent.21·5 per cent.
Married Man without children
Threshold at current prices£2,145£2,445
Threshold at 1949–50 prices (index) 1949–50=100106·0112·9
Threshold as percentage of average manual earnings32·1 per cent.33·5 per cent.
Married Man with two children under 11
Threshold at current prices£2,145£2,445
Threshold at 1949–50 prices (index) 1949–50=10066·871·1
Threshold as percentage of average manual earnings32·1 per cent.33·5 per cent.
Tax free income at current prices2,6583,014
Tax free income at 1949–50 prices (index) 1949–50=10079·984·6
Tax free income as percentage of average income*36·9 per cent.38·3 per cent.
Break even point at current prices3,8554,341
Break even point at 1949–50 prices (index) 1949–50=10097·6102·6
Break even point as percentage of average manual earnings57·6 per cent.59·5 per cent.
Married Man with four children†
Threshold at current prices·2,145£2,445
Threshold at 1949–50 prices (index) 1949–50=10050·053·2
Threshold as percentage of annual manual earnings32·1 per cent.33·5 per cent.
Tax free income at current prices3,1713,583
Assumed indexation percentage for 1983–84Difference in levels* forExtra tax payable per year by basic rate† taxpayer entitled to
Married man's allowanceAged married allowanceMarried man's allowanceAged married allowance
££££
(a) 6·550801524
(b) 650701521
(c) 5·550701521
(d) 550601518

* These amounts represent the difference in 1983–84 between the level of allowance if (a) the whole allowance were indexed by the appropriate percentage and (b) if only that part of the allowance equivalent to the corresponding single allowance were indexed. The rules for rounding set out in section 24 of the Finance Act 1980 have been followed in each case.

† Assuming a basic rate of 30 per cent.