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Income Tax

Volume 131: debated on Thursday 14 April 1988

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19.

To ask the Chancellor of the Exchequer what has been the real increase in the yield of income tax from the top 5 per cent. of taxpayers since 1978–79.

Compared with 1978–79, the income tax liability of the top 5 per cent. of taxpayers was some £3 billion higher in real terms in 1987–88.

24.

To ask the Chancellor of the Exchequer how the income tax revenue received from the top 5 per cent. of income earners has changed in each year from 1983; and what is his estimate for the coming financial year.

The income tax paid by the top 5 per cent. of taxpayers in each year since 1983 is as follows:

£ billion£ billion at 1988–89 prices
1983–848·510·5
1984–859·311·0
1985–8611·212·5
1986–8712·113·1
1987–8813·213·7
1988–8912·512·5

34.

To ask the Chancellor of the Exchequer what representations he has received from the CBI on the tax reductions for top taxpayers announced in the Budget.

The CBI's Budget document called for cuts in the top marginal rates of income tax to improve incentives. Commenting on the Budget the CBI president said:

"This is the Budget we have been waiting for. It will help maintain the momentum of Britain's economic recovery. It reflects CBI priorities…in particular it will provide greater incentives for all in British business."

35.

To ask the Chancellor of the Exchequer by how much he expects the income tax revenue from the top 5 per cent. of income earners to rise following the announcement in his Budget; and what proportion he estimates this will be of total income tax revenue.

The top 5 per cent. of taxpayers paid £13·2 billion income tax in 1987–88, 30 per cent. of the yield, while in 1988–89 the top 5 per cent. of taxpayers are expected to pay £12·5 billion, 28 per cent. of the yield. The calculation makes no allowance for any changes in taxpayers' behaviour as a result of the changes in the Budget.

36.

To ask the Chancellor of the Exchequer what proportion of total income tax he expects to be paid by the top 5 per cent. of taxpayers in 1988–89; and what was the equivalent figure in 1978–79.

44.

To ask the Chancellor of the Exchequer what proportion of total income tax he expects to be paid by the top 5 per cent. of taxpayers in 1988–89; and what was the equivalent figure in 1978–79.

66.

To ask the Chancellor of the Exchequer what proportion of total income tax he expects to be paid by the top 5 per cent. of taxpayers in 1988–89; and what was the equivalent figure in 1978–79.

It is estimated that in 1988–89 the top 5 per cent. of taxpayers will pay 28 per cent. of total income tax. The corresponding figure for 1978–79 was 24 per cent. The estimate for 1988–89 is provisional.

41.

To ask the Chancellor of the Exchequer what representations he has received in favour of introducing an initial rate of income tax at a lower level than the proposed standard rate.

My right hon. Friend has received very few representations on this subject.

47.

To ask the Chancellor of the Exchequer if he will give the figures for personal income tax rates and tax takes for 1978–79, 1981–82 and 1987–88 and the projected figures for 1988–89 and 1990–91.

Rates of income tax
1978–791 Slice of taxable income (£)Rate of tax Per cent.1981–821 Slice of taxable income (£)Rate of tax Per cent.1987–88 Slice of taxable income (£)Rate of tax Per cent.1988–89 Slice of taxable income (£)Rate of tax Per cent.
Lower rate1–75025
Basic rate751–8,000331–11,250301–17,900271–19,30025
Higher rates8,001–9,0004011,251–13,2504017,901–20,40040Over 19,30040
9,001–10,0004513,251–16,7504520,401–25,40045
10,001–11,0005016,751–22,2505025,401–33,30050
11,001–12,5005522,251–27,7505533,301–41,20055
12,501–14,00060Over 27,75060Over 41,20060
14,001–16,00065
16,001–18,50070
18,501–24,00075
Over 24,00083
1 Investment income surcharge was also payable for these years.
Net income tax receipts
Year£ billion
1978–7918·7
1981–8228·7
1987–88 (latest estimate)41·4
1988–89 (forecast)42·1

59.

To ask the Chancellor of the Exchequer what representations he has received on the income tax burden on single pensioners with a gross income of up to £5,000 per annum and married pensioners with a gross income of up to £8,000 per annum; and if he will make a statement.

My right hon. Friend has received a small number of representations, including an eloquent one from my hon. Friend.

70.

To ask the Chancellor of the Exchequer what is the total value of the reduction in income tax enjoyed by a person with a taxable income of £100,000 per annum (a) in respect of the arrangements made in his Budget Statement for 1988–89 and (b) in total during the period 1980–81 to 1988–89.

The reduction in the annual income tax liabilities of a married man with gross annual income of £100,000 would be (a) £13,498 from this year's Budget proposals and (b) £13,585 from all Budget changes from 1980–81 to 1988–89. The figures assume that the taxpayer is entitled to no income tax relief or allowance other than the married man's allowance, and compare income tax liabilities under the proposed tax regime for 1988–89 with those under the 1987–88 and 1980–81 regimes indexed to 1988–89 levels according to the statutory formula.

73.

To ask the Chancellor of the Exchequer what has been the real increase in the yield of income tax from the top 5 per cent. of taxpayers since 1978–79.

Information is given in the tables. Detailed forecasts of tax revenues are not published for years after 1988–89.

88.

To ask the Chancellor of the Exchequer what has been the real increase in the yield of income tax from the top 5 per cent. of taxpayers since 1978–79.

Compared with 1978–79 the income tax liability of the top 5 per cent. of taxpayers was some £3 billion higher in real terms in 1987–88.