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Income Tax

Volume 451: debated on Wednesday 8 November 2006

To ask the Chancellor of the Exchequer how many people on (a) half average and (b) half median income have paid income tax in each of the last 15 years. (80068)

Estimates of the number of taxpayers for the period 1996-97 to 2004-05 with total income at or below half of the mean and median are in the table.

Half of mean income (£)

Taxpayers with total income at or below half of the mean annual income (million)

Half of median income (£)

Taxpayers with total income at or below half of the mean annual income (million)

1996-97

5,810

3.3

4,210

0.8

1997-98

6,110

3.6

4,440

0.9

1998-99

6,580

3.3

4,720

0.6

1999-2000

6,780

3.1

4,970

0.7

2000-01

7,470

4.6

5,280

1.2

2001-02

7,790

4.2

5,570

1.1

2002-03

7,820

4.1

5,790

1.3

2003-04

8,110

4.4

5,980

1.6

2004-05

8,530

4.7

6,280

1.7

These estimates are based on the number of people facing tax liabilities. The 1996-97 to 2003-04 above estimates of taxpayers are based upon the Survey of Personal Incomes (SPI) and the 2004-05 figures are based upon the 2003-04 SPI projected forward to 2004-05 in line with Budget 2006 assumptions. Estimates of half of mean and median income are at individual level and have been derived from the Family Resource Survey.

Some families have their tax liabilities offset by tax credits. Estimates based on the 2003-04 Family Resource Survey (FRS) show that there were:

around 3.8 million taxpaying families with income at or below half the mean. Of these, around 0.4 million families were entitled to more tax credits than their income tax liabilities;

and around 1.4 million taxpaying families with income at or below half the median. Of these, around 0.2 million families were entitled to more tax credits than their income tax liabilities.

Caution should be exercised in drawing trends from these figures because sample estimates can demonstrate a large variability from year to year and the definitions of income from the two surveys are not necessarily the same.

Similar information for other years is not available.