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Higher Rate Tax

Volume 270: debated on Monday 29 January 1996

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To ask the Chancellor of the Exchequer (1) if he will list the numbers brought into the higher rate tax for each year since 1989–90 when the Government did not increased tax thresholds in line with (a) inflation and (b) earnings; [8307](2) what is the percentage change in the number of higher rate taxpayers since 1989–90; and what have been the changes in respect of the numbers of people paying the higher rate since 1989–90. [8306]

Estimated taxpayer numbers under independent taxation for years from 1990–91 are given in the table. Under the 1989–90 income tax regime indexed to allow for changes in the retail prices index there would be 1.5 million higher rate taxpayers in 1996–97. Equivalent estimates for all intervening years could be provided only at disproportionate cost. Statutory indexation of tax thresholds is expressed in terms of price rather than earnings movements.

Estimated taxpayer numbers1
Millions
Number of lower rate taxpayersNumber of basic rate taxpayersNumber of higher rate taxpayers
1990–9124.41.70
1991–9224.11,62
1992–934.2419.41.72
Standard rate of basic rate
£ per annum
Personal allowance Age under 65Age allowance Age 65–74Age allowance Age 75 or moreStandard rate of basic retirement pension Under 8080 or more
1979–801,1651,5401,5401,0941,107
1980–811,3751,8201,8201,2851,298
1981–821.3751,8201,8201.4581.471
1982–831,5652.0702,0701,6011,614

Estimated taxpayer numbers1

Millions

Number of lower rate taxpayers

Number of basic rate taxpayers

Number of higher rate taxpayers

1993–945.1718.11.74
1994–9525.0018.32.10
1995–9625.4018.12.20
1996–976.3017.32.20

1Figures for 1989–90 are in terms of joint taxation, figures for later years include individuals under independent taxation and are therefore not directly comparable. It is estimated that there were about 20 million single people and married couples liable to tax at the basic rate only and 1.5 million liable at the higher rate.

2Provisional.