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Income Tax: Crewe

Volume 476: debated on Tuesday 20 May 2008

To ask the Chancellor of the Exchequer how many people in Crewe and Nantwich constituency paid only the 10 pence rate of income tax in 2007-08; and if he will make a statement. (205194)

[holding answer 14 May 2008]: The estimated number of taxpayers in each Government office region paying tax only at the starting rate of income tax for 2007-08 is shown in Table 2.2 ‘Number of individual income taxpayers by country and region’, which is available from HM Revenue and Customs website at:

Reliable information on the number of taxpayers who pay income tax at the 10p starting rate for geographic areas below country and region are not available but information on the total number of taxpayers in each parliamentary constituency is shown in Table T3.15. These tables can be found at the HM Revenue and Customs website at:

These estimates are based on the latest available Survey of Personal Incomes (2005-06).

The removal of the 10p rate from 2008-09 is part of a package of reforms announced in Budget 2007 and should not be looked at in isolation. Individuals previously paying tax only at the starting rate of income tax could be better off through other measures, for example, higher age related personal allowances or increased tax credits. Individuals paying tax at the starting rate on their savings will not be affected as this rate will be replaced by a new starting rate for savings income.

The Chancellor announced on 13 May an increase in the individual personal tax allowance by £600 to £6,035 for this financial year, benefiting all basic-rate taxpayers under 65 and removing 600,000 low-income individuals from tax. Around 22 million basic-rate taxpayers will gain an additional £120 this year, fully compensating 80 per cent. of households that lose from the Budget 2007 reforms, with the remainder seeing their loss at least halved. The Government will set out their plans for future years in the 2008 pre-Budget report.