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Income Tax

Volume 127: debated on Thursday 11 February 1988

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30.

To ask the Chancellor of the Exchequer what has been the effect on the income, per week, of a single person and a married couple on average national earnings as a result of cuts in the standard rate of income tax and the raising of personal allowances since 1979.

The effect of reductions in income tax since 1978–79 has been to increase income after tax by £10·69 per week for a married man and £10·88 per week for a single person on average earnings in 1987–88. The calculation is made by comparing the tax liabilities of the single person or married man under the 1987–88 income tax regime with those under the 1978–79 regime indexed to 1987–88 levels according to the statutory formula. Average earnings estimated at £229·80 per week are those for full-time men in all occupations, paid at adult rates, whose pay is unaffected by absence.

82.

To ask the Chancellor of the Exchequer how much a taxpayer earning £50,000 a year would gain per year if the top rate of tax were reduced to 40 per cent.

A married man with gross income of £50,000 per year and no allowances or reliefs other than the married man's allowance would gain £2,961 if the top rate of income tax were reduced to 40 per cent. for 1988–89. The estimate assumes indexation of allowances and rate bands from their 1987–88 levels in accordance with the statutory formula.