To ask the Chancellor of the Exchequer if he will specify the distribution of gains in the Budget from each item where tax changes were made at other than normal indexation, according to income bands as follows: less than £5,000 per year; £5,000 to £7,500; £7,500 to £10,000; £10,000 to £12,500; £12,500 to £15,000; £15,000 to £20,000; £20,000 to £30,000; £30,000 to
| Reduction in income tax liability in 1988–89 compared with indexation of the 1987–88 income tax regime | |||||||
| Range of total income | Tax units1 as a percentage of total liable to tax | Increase in personal allowances | Increase in basic rate limit | Reduction in basic rate | Abolition of higher rates above 40 per cent. | Budget proposals for allowances, rates and thresholds | |
| per cent. | Amount £ million | Amount £ million | Amount £ million | Amount £ million | Amount £ million | As a percentage of total per cent. | |
| Less than £5,000 | 12·2 | 70 | — | 50 | — | 120 | 2·0 |
| £5,000 to £7,500 | 17·7 | 110 | — | 210 | — | 320 | 5·3 |
| £7,500 to £10,000 | 15·9 | 110 | — | 300 | — | 410 | 6·8 |
| £10,000 to £12,500 | 13·8 | 120 | — | 350 | — | 470 | 7·8 |
| £12,500 to £15,000 | 10·9 | 100 | — | 350 | — | 450 | 7·4 |
| £15,000 to £20,000 | 13·8 | 140 | — | 590 | — | 730 | 12·0 |
| £20,000 to £30,000 | 10·9 | 130 | 40 | 710 | 10 | 890 | 14·7 |
| £30,000 to £50,000 | 3·7 | 60 | 60 | 330 | 310 | 760 | 12·7 |
| Above £50,000 | 1·1 | 20 | 20 | 110 | 1,750 | 1,900 | 31·3 |
| TOTAL | 100·0 | 860 | 120 | 3,000 | 2,070 | 6,050 | 100·0 |
| 1 Counting married couples as one and combining their incomes. Under the Budget proposal it is estimated that 20·9 million tax units will pay tax in 1988–89. | |||||||
To ask the Chancellor of the Exchequer if he will update, to take account of the 1988 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.
To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for Oldham, West, Official Report, 25 January, columns 79–82, regarding income gains and losses from successive Budgets, in the light of his latest budget.
£50,000; and above £50,000; and if he will indicate the percentage of total tax changes accruing to each group and the percentage of the total numbers of taxpayers that each group comprises.
[holding answer 12 April 1988]: The table shows the estimated change in income tax liability for individuals at 1988–89 levels of income resulting from the main Budget proposals compared with indexation of the 1987–88 income tax regime.
[holding answer 12 April 1988]: The information is in the tables. For each financial year shown, the tables compare the yield from the tax regime in that year with the 1978–79 tax regime. All the estimates are based on a provisional 1988–89 income base projected from the 1985–86 survey of personal incomes and all tax regimes have been indexed to 1988–89 levels according to the statutory formula. The comparisons therefore allow for budgetary changes in income tax since 1978–79 but not for changes in definition or any other factors which might affect the income base.
| Reductions( + )/increase( — ) in income tax compared with 1978–79 indexed regime | ||||||||||||
| £ million | ||||||||||||
| Range of total income in 1988–89 £ | Number units paying tax in 1988–89 (miilion) | 1979–80 | 1980–81 | 1981–82 | 1982–83 | 1983–84 | 1984–85 | 1985–86 | 1986–87 | 1987–88 | 1988–89 | |
| Under 5,000 | 2·6 | 180 | 70 | -280 | -240 | -30 | 90 | 190 | 220 | 280 | 400 | |
| 5,000 to 10,000 | 7·0 | 1,050 | 600 | -310 | -210 | 310 | 650 | 960 | 1,230 | 1,760 | 2,490 | |
| 10,000 to 15,000 | 5·2 | 1,380 | 1,000 | 200 | 290 | 740 | 1,120 | 1,420 | 1,780 | 2,510 | 3,430 | |
| 15,000 to 20,000 | 2·9 | 1,130 | 850 | 320 | 380 | 690 | 970 | 1,170 | 1,470 | 2,080 | 2,810 | |
| 20,000 to 30,000 | 2·3 | 1,510 | 1,230 | 500 | 590 | 1,020 | 1,360 | 1,550 | 1,910 | 2,620 | 3,510 | |
| 30,000 to 50,000 | 0·8 | 1,350 | 1,170 | 620 | 680 | 990 | 1,280 | 1,380 | 1,530 | 1,820 | 2,580 | |
| 50,000 to 70,000 | 0·1 | 680 | 620 | 440 | 460 | 560 | 700 | 720 | 740 | 780 | 1,250 | |
| Over 70,000 | 0·1 | 1,750 | 1,700 | 1,540 | 1,560 | 1,640 | 2,060 | 2,070 | 2,080 | 2,100 | 3,530 | |
| Total | 20·9 | 9,010 | 7,220 | 3,020 | 3,510 | 5,910 | 8,220 | 9,470 | 10,960 | 13,940 | 20,000 | |
| Average gain/loss( — ) per tax unit (£ per annum) | ||||||||||
| Range of total income in 1988–89 | 1979–80 | 1980–81 | 1981–82 | 1982–83 | 1983–84 | 1984–85 | 1985–86 | 1986–87 | 1987–88 | 1988–89 |
| £ | ||||||||||
| under 5,0001 | 50 | 20 | -80 | -70 | -10 | 30 | 60 | 60 | 80 | 120 |
| 5,000 to 10,0001 | 150 | 80 | -40 | -30 | 40 | 90 | 130 | 170 | 240 | 350 |
| 10,000 to 15,000 | 270 | 190 | 40 | 60 | 140 | 220 | 270 | 340 | 480 | 660 |
| 15,000 to 20,000 | 390 | 300 | 110 | 130 | 240 | 340 | 410 | 510 | 720 | 980 |
| 20,000 to 30,000 | 660 | 540 | 220 | 260 | 450 | 600 | 680 | 840 | 1,150 | 1,540 |
| 30,000 to 50,000 | 1,740 | 1,500 | 800 | 870 | 1,270 | 1,650 | 1,770 | 1,970 | 2,340 | 3,310 |
| 50,000 to 70,000 | 4,990 | 4,560 | 3,240 | 3,380 | 4,120 | 5,150 | 5,290 | 5,440 | 5,740 | 9,160 |
| over 70,000 | 18,620 | 18,090 | 16,380 | 16,600 | 17,450 | 21,910 | 22,020 | 22,130 | 22,340 | 37,550 |
| Total | 410 | 330 | 140 | 160 | 270 | 370 | 430 | 500 | 630 | 910 |
Note:
All information is in terms of tax units—that is married couples are counted as one and their incomes combined.
1 Average gains are calculated by reference to the estimated number would be liable to pay tax under the indexed 1978–79 regime; this number is some 1,100.000 greater than the numbers paying tax in 1987–88, some 900,000 in the income range below £5,000 and 200,000 in the range £5,000 to £10,000.