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Personal Income Tax Allowance

Volume 410: debated on Monday 18 August 2003

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To ask the Chancellor of the Exchequer what his estimate is of the cost of raising the personal income tax allowance to (a) £5,000, (b) £6,000, (c) £7,000 and (d) £7,500 per year; how many people would cease to pay income tax as a consequence; and if he will make a statement. [130560]

The full-year cost of making these tax changes in 2003–04 are set out in the following table.

Raising the under 65 personal income tax allowance in 2003–04 toCost (£ billion)Number of people cease to pay income tax (thousand)
(a) £5,000 per year2.4500
(b) £6,000 per year8.31,800
(c) £7.000 per year13.93,000
(d) £7,500 per year16.63,500
These estimates exclude any behavioural response to the tax change and are based upon the 2000–01 Survey of Personal Incomes and consistent with Budget 2003.

To ask the Chancellor of the Exchequer what his estimate is of the cost of raising the personal income tax allowance to £10,000 per year for people aged 65 years and over; and if he will make a statement. [130566]

The estimated full-year cost of raising the personal income tax allowance to £10,000 per year for those age 65–74 and 75 plus in 2003–04 is £2 billion.This estimate excludes any behavioural response to the tax change and is based upon the 2000–01 Survey of Personal Incomes and consistent with Budget 2003.