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Income Tax

Volume 448: debated on Thursday 29 June 2006

To ask the Chancellor of the Exchequer (1) how many income tax payers had incomes of less than £7,185 per year in the last year for which figures are available; and if he will make a statement; (80638)

(2) how many upper rate income tax payers had a gross income of less than £50,000 in the last period for which figures are available; and if he will make a statement.

The estimated additional cost of introducing the proposed changes for 2006-07 is in the table.

Cost of the proposed income tax changes, 2006-07

Current regime

Proposed option

Personal allowance (£)

5,035

7,185

Starting rate (percentage)

10

20

Basic rate (percentage)1

22

20

Basic rate limit (£)

33,300

42,815

Additional cost (£ billion)

-17.1

1 The marginal rate on earnings.

The figure excludes any estimate of behavioural response to the tax changes which could be significant given the scale of the changes.

There are an estimated 2.3 million taxpayers with total income below £7,185 and 1.4 million higher rate taxpayers with total income below £50,000.

The estimates are based on the 2003-04 Survey of Personal Incomes projected forward to 2006-07 in line with Budget 2006 assumptions.