§ Dr. CableTo ask the Chancellor of the Exchequer what are the projected revenue implications in 1999–2000 and 2000–01 of the abolition of dividend tax credits of non-taxpaying pensioners(a) on the assumption that savers fully switch into ISAs and (b) on the assumption that there is no switching. [79087]
§ Ms HewittTo correct a bias in the tax system against the retention of profits for investment, payable tax credits on dividends paid to individuals have been withdrawn from 5 April 1999. The potential revenue impact of withdrawing payable tax credits from non-taxpaying pensioners after 5 April is about £25 million a year. The effect will, however, be reduced to the extent that investors who switched their investments into PEPs before 5 April this year, or into ISAs after that date, or into interest bearing investments on which non-taxpayers can reclaim tax deducted at source on interest paid. As a result the effect could be very much less than £25 million a year.