§ Mr. Roy Hughesasked the Chancellor of the Exchequer if he will now make a statement about the treatment for tax purposes in 1977–78 of the parents of children living outside the United Kingdom.
§ Mr. Joel BarnettYes. Where such parents are entitled to child tax allowance under the ordinary rules, they will be able to claim the allowance for 1977–78 at the current 1976–77 levels—£300 for children not over 11, £335 for children over 11 and not over 16 and £365 for children over 16—for any child who throughout 1977–78 is under 19 and lives outside the United Kingdom, and for whom no child benefit is paid for any week in that year. These levels of allowance will not, however, apply to taxpayers working abroad, namely, civil servants and members of the forces, where child benefit remains payable under special arrangements, nor for children living in countries with which we have reciprocal agreements on social security and where there will normally be entitlement either to child benefit or to a comparable benefit abroad.
Since the Inland Revenue cannot from its own records adequately identify those who would be entitled to child tax allowances at this special rate, the allowances of those concerned will be reduced in the initial PAYE re-coding this winter in the same way as child tax allowances for other taxpayers are to be reduced—as announced in the statement of 16th November. But a notice issued to all taxpayers with their new PAYE code numbers will invite those who think they may be entitled to the higher child tax allowances in 1977–78 to apply to their local
644W
Net weekly income Single person No children 1 child Married couple with 2 children 3 children 4 children £ £ £ £ £ £ April 1970 … 19.12 20.23 21.14 22.33 23.59 24.85 April 1975 … 37.68 39.57 41.18 43.43 45.67 47.91 Notes: 1. Average earnings are the New Earnings Survey estimates of the average earnings of full-time male manual workers aged 21 and over in April of each year. 2. Net weekly income is average earnings plus family allowances, where appropriate, less in-come tax and national insurance contributions. 3. It is assumed that the taxpayer was "not contracted out" of the Graduated Pension Scheme in April 1970. tax office or PAYE inquiry office for the appropriate claim form after 1st January 1977.
The longer-term arrangements after 1977–78 for children living abroad will be the subject of a later statement.
§ Mr. Durantasked the Chancellor of the Exchequer if he has made any provision for increasing the earning limit of £115 per annum before child allowance is cut regarding those children remaining at school after the age of 16 years.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 13th December 1976; Vol. 922, cc. 548–9], gave the following reply:
Yes. Section 29(3) of the Finance Act 1976 increased this limit to £350 with effect from 6th April 1976. But where the child is under 18 and unmarried throughout the year and does not have earnings in excess of £235, the allowance is reduced by the amount by which the child's investment income exceeds £115.