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Taxation

Volume 114: debated on Monday 6 April 1987

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asked the Chancellor of the Exchequer what would be the cost to the Exchequer of raising the tax threshold to (a) supplementary benefit levels, (b) supplementary benefit levels, including housing costs and (c) family income supplement levels.

Broad estimates of the direct revenue effect—in a full year at 1987–88 levels of income —of changing tax thresholds are as follows:

Taxpayers and income lax payable by range of total income1, 1987–88
At basic rateAt rates in excess over basic rate
Total income1 Lower limitNumber of tax units2 3Amount of tax4Number of tax units2Amount of taxAverage rate of tax on all incomesAverage tax on all incomes
£ pamillions£ billionmillions£ billionper cent.£ thousand
2,4253·20·9007·5280
5,0003·22·40012·5740
7,0004·45·2001401,200
10,0005·39·70015·01,850
15,0002·77·50016·52,800
20,0001·67·30·60·219·54,650
30,0000·87·60·62·931·014,150
All ranges21·240·61·23·117·52,080
1 Total income for income tax purposes.
2 Counting married couples as one and combining their incomes.
3 Including taxpayers who also pay at higher rates.
4 Includes tax at composite rate.

asked the Chancellor of the Exchequer if he will update, to take account of the 1987 Budget, the information on tax changes contained in his reply of 28 April 1986 to the hon. Member for Oldham, West (Mr. Meacher), Official Report, columns 326–8.

Yield/Cost

(a) to supplementary benefit ordinary scale rates plus appropriate child additions

Yield £6 billion

(b) to supplementary benefit ordinary scale rates plus appropriate child additions and average housing costs

Cost £2¼ billion

(c) to family income supplement prescribed amounts for families with children and to levels increased by the same proportion for families without children

Cost £6½ billion

Detailed costs of the changes relating to supplementary benefit could be made only at disproportionate cost because entitlement to supplementary benefit depends upon a range of factors related to individual family circumstances. In the above costings, income tax reliefs other than personal allowances have been assumed to remain unchanged.

asked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing his forecast for 1987–88 of the amount of income tax payable by range of income on the same basis as that shown in table 5.11 of the latest edition of "Social Trends"; and if he will add a table for all indirect taxes, including rates.

The latest estimates are given in the table below. They are based on a projection of the 1984–85 survey of personal incomes and are therefore provisional. I regret that it is not possible to provide reliable estimates by income range in respect of indirect taxes or rates.

[pursuant to his reply, 25 March 1987, c. 216]: The information is given in the table.

Gains from the Budget proposals for income tax allowances, rates, and thresholds compared with indexation by range of income

1

Range of gross income

2

Tax units as percentage of total liable to tax

Reduction in income tax liability in 1987–88 from Budget proposals compared with indexation

£ per year

Per cent.

Amount £ million

As percentage of total Per cent.

Under 5,00015603
5,000 to 7,500192209
7,500 to 10,0001731012
10,000 to 12,5001436014
12,500 to 15,0001133013
15,000 to 20,0001353021
20,000 to 30,000749019
30,000 to 50,00032008
Above 50,0001301
All1002,530100

1 Income for income tax purposes

2 That is counting married couples as one and combining their incomes.

asked the Chancellor of the Exchequer what was the cost in lost tax revenue of an individual male and an individual female unemployed person in each of the past five years.