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Taxation: Income Tax

Volume 694: debated on Wednesday 25 July 2007

asked Her Majesty's Government:

How much income tax is paid on earned income from employment by people over the state retirement age at (a) the starting and basic rate of income tax; and (b) the higher rate of income tax, for the latest year for which figures are available. [HL4926]

Information on the amount of income tax liabilities on earned income from employment by taxpaying individuals over the state pension age in 2004-05 is given in the table below.

Amounts: £ millions

Starting rate taxpayers (1)

Savers rate taxpayers (2)

Basic rate taxpayers (3)

Higher rate taxpayers (4)

Total

Starting rate

18

2

121

5

146

Basic rate

0

0

1,370

282

1,650

Higher rate

0

0

706

706

(1)Taxpayers with a marginal rate at the 10 per cent starting rate from an extra £1 on earnings (2)Taxpayers with a marginal rate at the 20 per cent lower rate for savings income or the 10 per cent ordinary dividend rate from an extra £1 on earnings

(3)Taxpayers with a marginal rate at the 22 per cent basic rate from an extra £1 on earnings

(4)Taxpayers with taxable income above the higher rate threshold

Note:

State pension age is defined as females aged 60 or over and males aged 65 or over.

Tax paid on self-employment income is not included in this table.

Figures represent what the cost to the Exchequer would be if income from employment is zero.

Estimates are from the Survey of Personal Incomes 2004-05.