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Income Tax: Tax Allowances

Volume 476: debated on Thursday 22 May 2008

To ask the Chancellor of the Exchequer what estimate he has made of the cost to (a) private businesses and (b) public sector employers of implementing his decision to increase income tax personal allowances in 2008; and if he will publish a full impact assessment. (206653)

[holding answer 19 May 2008]: HM Revenue and Customs (HMRC) and employers' representatives have long established processes in place to ensure any changes to tax can be implemented by businesses as soon and simply as possible. HMRC is talking to employers' representatives about the smooth and timely implementation of the changes announced by the Chancellor. Each year, HMRC sends tools to employers so that they can automatically implement the annual Budget changes. HMRC are following this well-understood process in implementing the changes announced by the Chancellor. HMRC are issuing updated tools to employers, which will include all the details to enable an employer to automatically implement the changes. For smaller employers who continue to operate their payrolls manually, HMRC will provide tax tables to help them deal with the changes.

To ask the Chancellor of the Exchequer what assessment he has made of the likely effect on economic growth of the reduction in income tax revenues arising from the proposed increase in the personal allowance. (207097)

The Treasury last published forecasts for the UK economy in the 2008 Financial Statement and Budget Report (HC 388). These will be updated as part of the 2008 pre-Budget report, as is normal practice.