§ 50. Professor Savoryasked the Chancellor of the Exchequer whether he can give an estimate of the cost to the Exchequer involved in substituting the new limits of Income Tax of £2 for a single taxpayer, £3 for a married couple without children, £4 for a married couple with one child and £5 for a married couple with two children; and, secondly, the cost of the promised concession to widows and widowers?
§ Sir K. WoodMy hon. Friend is under a misapprehension in thinking that these limits involve a loss of revenue to the Exchequer. The limits do not reduce the total tax bills of the taxpayers concerned but defer collection. The purpose of these limits is to prevent the actual amount paid in any week in which the wages earned are lower than usual from falling, by reason of the tax deduction, below the figures stated in the Question. Where in any week the tax deducted is limited in this way the amount under-deducted is carried forward and deducted in the two closing weeks of the six months' period in accordance with the existing Regulations. The same considerations apply to the application of the higher limits to widows and widowers with dependent children.