asked the Chancellor of the Exchequer (1) if he will update, to take account of the 1987 Budget, the information on income tax reductions provided in his reply of 14 April 1986 to the hon. Member for Thurrock, Official Report, columns 314–15;(2) if he will update, to take account of the 1987 Budget, the information on tax changes contained in his reply of 21 October 1986 to the hon. Member for Oldham, West (Mr. Meacher),
Official Report, columns 807–8.
[pursuant to his replies, 25 March 1987, c. 215–16]: The information is in the tables. For each financial year the yield from the tax regime in that year is compared with the 1978–79 tax regime. All estimates are calculated on the 1987–88 tax base and all tax regimes have been indexed to 1987–88 by reference to the statutory formula. The comparisons therefore allow for budgetary changes in income tax rates and allowances, but not for any change since 1978–79 in the definition of the tax base.The first table shows the total reduction (+) or increase (-) in tax yield from each income range; and the second table shows the average change for individual tax units.As child tax allowances were being phased out in 1978–79, they have been excluded from the comparison.
Range of total income in 1987–88
| Number units paying tax in 1987–88 (million)
| 1979–80
| 1980–81
| 1981–82
| 1982–83
| 1983–84
| 1984–85
| 1985–86
| 1986–87
| 1987–88
|
| 20,000–30,000 | 1·6 | 1,010 | 980 | 390 | 460 | 800 | 1,080 | 1,210 | 1,470 | 1,980 |
| 30,000–50,000 | 0·6 | 1,050 | 970 | 550 | 600 | 840 | 1,040 | 1,110 | 1,220 | 1,430 |
| Over 50,000 | 0·16 | 1,510 | 1,450 | 1,220 | 1,250 | 1,380 | 1,640 | 1,660 | 1,680 | 1,710 |
| Total | 21·2 | 6,000 | 6,010 | 2,060 | 2,500 | 4,740 | 6,690 | 7,850 | 9,200 | 11,870 |
Note: All information is in terms of tax units—that is married couples are counted as one and their incomes combined.
Average gain (+)/loss(-) per lax unit
| |||||||||
(£ per annum)
| |||||||||
Range of total income in 1987–88
| 1979–80
| 1980–81
| 1981–82
| 1982–83
| 1983–84
| 1984–85
| 1985–86
| 1986–87
| 1987–88
|
| Under 5,000 | 20 | 30 | -70 | -60 | -5 | 30 | 60 | 70 | 110 |
| 5,000–10,000 | 80 | 90 | -40 | -20 | 50 | 100 | 140 | 180 | 260 |
| 10,000–15,000 | 180 | 190 | 40 | 50 | 140 | 220 | 270 | 340 | 480 |
| 15,000–20,000 | 280 | 290 | 110 | 130 | 230 | 540 | 410 | 510 | 710 |
| 20,000–30,000 | 630 | 610 | 240 | 280 | 500 | 670 | 750 | 910 | 1,240 |
| 30,000–50,000 | 1,800 | 1,670 | 940 | 1,020 | 1,440 | 1,800 | 1,910 | 2,110 | 2,460 |
| Over 50,000 | 9,460 | 9,070 | 7,640 | 7,790 | 8,610 | 10,220 | 10,380 | 10,490 | 10,710 |
| Total | 270 | 270 | 90 | 110 | 220 | 300 | 360 | 420 | 560 |
Note: Average gains and losses are calculated by reference to the estimated number who would pay tax under the indexed 1978–79 regime which is some 950,000 greater than the numbers paying tax in 1987–88: Of these, about 800,000 more with incomes under £5,000 and about 150,000 more with incomes between £5,000 and £10,000 would pay tax.