Notes to tables

1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances. Earners, including working wives, are assumed to pay Class 1 NI contributions at the contracted in rate. The figures for NI contributions are financial year averages.

2. The two earner married couple is assumed to have combined earnings equal to the various multiples of average earnings. In calculating disposable income it is assumed that these earnings are split between husband and wife in the ratio 60:40.

3. For the married couple with two children, child benefit is treated as a negative income tax.

4. Average earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence.

These were £256·30 per week in 1988–89, and estimated to be £280·00 per week in 1989–90, using the Government Actuary Department's assumption of 91 per cent. growth over 1988–89 as published in the 1989 Autumn Statement.

5. The estimates of indirect taxation are derived from the 1985 family expenditue survey, and are based on the illustrative assumption that 10 per cent. of disposable income is saved. There are wide variations in spending patterns between households with similar incomes and composition, and estimated payments of VAT, other indirect taxes and rates are therefore approximate, even within the income range for which figures are shown. Outside this range the margin of error is even higher and reliable estimates cannot be made. Because of sampling variation, there can be substantial differences between the estimates obtained from family expenditure surveys for different years.

6. 1989–90 figures are converted into 1988–89 prices by assuming that the RPI is 71/2 per cent. higher in 1989–90 than the previous financial year. This is consistent with the forecasts published in the 1989 Autumn Statement.