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Income Tax

Volume 493: debated on Tuesday 2 June 2009

To ask the Chancellor of the Exchequer what estimate he has made of the full-year cost to the Exchequer for (a) 2009-10, (b) 2010-11 and (c) 2011-12 of reducing the (i) starting and (ii) basic rate of tax on savings income to zero. (251189)

The full year cost for each of the three years is shown in the table. The estimates are based on the 2006-07 Survey of Personal Incomes projected forward in line with Budget 2009 assumptions. The figures exclude any estimate of behavioural response.

£ million

2009-10

2010-11

2011-12

Zero starting rate for savings income

20

55

80

Zero basic rate for savings income1

510

1,570

2,440

1 Additional costs assuming the starting rate for savings income is zero.