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Income Tax

Volume 202: debated on Friday 24 January 1992

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To ask the Chancellor of the Exchequer what would be the yield/cost in 1991–92 and 1992–93 on both a first year and a full year basis of (a) raising the basic rate limit to taxable income of £29,000,

Privatisation proceeds 1979–80 to 1990–91 ( outturn)
Enterprise Oil384
Forestry Commission142128151613121511
General Practice Finance Corporation67
Harland and Wolff8
Land Settlement21252
Motorway Service Area Leases412127
National Enterprise Board Holdings378321683034
National Freight Consortium15
Professional and Executive Recruitment5
Plant Breeding Institute265
Rover Group3150
and £46,000, (c) charging higher rate tax at 41 per cent. on taxable income above £46,000, (d) restricting all personal tax allowances to the basic rate, (e) restricting relief for pension contributions made by individuals to the basic rate, (f) a combination of (a), (b), (c) and (d) and (g) a combination of (a), (b), (c) and (e).

Estimates of the increase in liability to income tax compared with statutory indexation in 1992–93 are as follows. They do not allow for any behavioural effects that might result from such a change to the tax system and do not include capital gains tax:

£ million
Cost(-)/yield (+) in a full year at 1992–93 levels of income
Tax regime specified in (a), (b) and (c)-1,530
(d) Restriction of all personal allowances to the basic rate+1,460
(e) Restriction of pension contributions to the basic rate+400
(f) Combination of (a), (b), (c) and (d)-820
(g) Combination of (a), (b), (c) and (e)-1,250
Approximately one half of the full year yield from such regimes would affect income tax receipts in the first year.