To ask the Chancellor of the Exchequer what is the gain to taxpayers at less than half, half to three-quarters, three-quarters to one, one to one and a half, one and a half to two, two to three, three to five and five to 10 and more than 10 times average earnings from the 2p cut in income tax and the rise in personal allowances; if he will specify these bands in pound sterling per year at current earnings; how many taxpayers are in each of these bands; and what percentage of the total number of taxpayers each group comprises.
| Reductions in income tax liability resulting from changes in allowances, the basic rate limit, and the basic rate in the 1988 Budget compared with indexation | ||||
| Gross income in 1988–89 | Number of single people and married couples gaining | |||
| As a multiple of average earnings | £ per year | '000s | Per cent. of total | £ million2 |
| Less than 0·5 | less than 6,362 | 14,700 | 22 | 270 |
| 0·5–1 | 6,362–12,724 | 8,240 | 39 | 1,090 |
| 1–1·5 | 12,724–19,087 | 4,530 | 21 | 1,020 |
| 1·5–2 | 19,087–25,449 | 2,060 | 10 | 690 |
| 2–3 | 25,449·38,173 | 1,150 | 5 | 590 |
| 3–5 | 38,173–63,622 | 360 | 2·5 | 220 |
[holding answer 12 April 1988]: The table shows the total reductions in income tax liability for single people and married couples from the changes in personal allowances, the basic rate limit and the basic rate of income tax proposed in the 1988 Budget. The change in liability is in comparison with the 1987–88 tax regime indexed to 1988–89 levels. Incomes above the level corresponsing to five times average earnings have been combined into a single range to provide a more reliable estimate. Average earnings are those for full-time men in all occupations whose pay is unaffected by absence.
Gross income in 1988–89
| Number of single people and married couples gaining
| |||
As a multiple of average earnings
| £ per year
| '000s
| Per cent. of total
| £ million2
|
| over 5 | over 63,622 | 120 | 0·5 | 80 |
| Total | 21,150 | 100 | 3,980 | |
1 Includes 240,000 taken out of tax by increases in allowances. | ||||
2 Total cost of reductions in full year.
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