§ Mr. A. Royle
asked the Chancellor of the Exchequer how much reduction in revenue and what increase in Corporation Tax would be required to regain a 328W similar amount for the Exchequer if the standard rate of Income Tax is reduced by 3d., 6d., 9d., 1s., 2s., and 3s., respectively.
§ Mr. MacDermot
On the basis of the 1966–67 estimates the figures for a full year are as follows:—
Reduction in standard rate by itself Cost for a full year Increase in rate of Corporation Tax (to nearest 1 per cent.) (£m.) Per cent. 3d. 64 2 6d. 127 4 9d. 191 6 1s. 257 9 2s. 523 † 3s. 905* † * This assumes that the higher reduced rate is also reduced to 5s. 3d. † The estimated increases in the rates of Corporation Tax take account of the consequential side effects on overspill relief and on the yield from income tax under Schedule F on dividends, etc. To produce a net yield of £523m. or £905m. the rate of Corporation Tax would have to be so high that the consequential effects become too speculative, and so no figures have been given for these two cases.