Income tax

HC Deb 09 July 1975 vol 895 cc194-5W

Mr. Peter Rees

asked the Chancellor of the Exchequer at what point 50 per cent. of personal income is taken by income tax in the case of a married man without children and no other personal reliefs in each of the countries of the European Community.

Mr. Joel Barnett

The following table shows the point at which the effectiveaverage—rate of personal income tax for a married man, without children, reaches 50 per cent. of gross income from employment in each of the EEC countries. The treatment of other forms of earned income and of the various kinds of investment income varies too widely both within and between countries to permit of meaningful comparison:

	£
Belgium	…	…	…	34,400(a)
Denmark	…	…	…	20,000(b)
France	…	…	…	Not reached
Germany	…	…	…	91,300
Ireland	…	…	…	13,300(c)
Italy	…	…	…	100,000(d)
Luxembourg	…	…	…	110,000
Netherlands	…	…	…	25,200
United Kingdom	…	…	…	16,365(e)

Notes:

Rates of exchange at end June 1975 have been used. Figures take into account:

(a) Small local income tax surcharge.

(b) Local income tax at Copenhagen rate.

(c) Recent proposal for 10 per cent. surcharge.

(d) Temporary surtax for 1974.

(e) Rates of tax and allowances proposed for the year.

Mr. Peter Rees

asked the Chancellor of the Exchequer at what point the current top rate of personal income tax is reached; and whether there is any overall limit, in each of the countries of the European Community.

Mr. Joel Barnett

The following table shows the point at which the current top rate of personal income tax is reached on employment income in each of the EEC countries. The treatment of other forms of earned income and of the various kinds of investment income varies too widely, both within and between countries, to permit of meaningful comparison.

	Top marginal rate	Single	Married man without children
	Per cent.	£	£
Belgium	72	51,300	51,300
	(75.6)
Denmark	39.6	7,400	7,400
	(60.2)
France	48.6	38,800	38,800
Germany	56	25,300	50,300
Ireland	77	10,960	11,304
Italy	82	382,000	382,000
Luxembourg	57	9,700	19,100
Netherlands	71	28,200	28,500
United Kingdom	83	20,676	20,956

Notes:

Figures in brackets include local income tax where applicable.

Rates of exchange at end June 1975 have been used.

Minimum allowances and latest rates of tax in force or proposed for the current year have been assumed.

There are overall limits in two countries of the Community. In Belgium national income tax may not exceed 50 per cent. of taxable income plus two surcharges, making a maximum effective rate of approximately 60 per cent. In Denmark combined income taxes and social security contributions may not exceed 66¾ per cent. of taxable income.