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Income Tax: Tax Rates and Bands

Volume 485: debated on Thursday 18 December 2008

To ask the Chancellor of the Exchequer how many individual taxpayers affected by the withdrawal of the 10 pence starting rate for income tax will pay more income tax than they did before the withdrawal of the rate when the steps announced in (a) Budgets 2007 and 2008, (b) the Chancellor's statement dated 13 May, on income tax and (c) the Pre-Budget Report 2008 are taken into account. (242857)

[holding answer 11 December 2008]: The personal tax measures announced by the Chancellor in the 2008 pre-Budget report will permanently reduce the number of households paying more net tax as a result of the Budget 2007 direct tax and benefit changes from 5.3 million originally to 500,000 in 2011-12. The 13 May increase in personal allowances for this year reduced the number of households paying more net tax from these changes to 1.1 million in 2008-09.

The Government's response to the Treasury Committee's report ‘Budget Measures and Low Income Households’ available at

www.publications.parliament.uk/pa/cm/cmtreasy.htm

explained in answer to recommendation 9, and at the start of Annexes A and B, why it is not possible to provide individual analysis of the Budget 2007 direct tax and benefit changes.