Income Tax (Hansard, 7 April 1977)

§ Mr. Sproat
asked the Chancellor of the Exchequer how many persons have given as their employment for purposes of income tax assessment, astrologer, palmist, numerologist, yoga adept, psychic consultant, or other related practices.

§ Mr. Robert Sheldon
I would refer the hon. Member to the reply given to him on 1st April.—[Vol. 929, c. 294–5.]

§ Mr. Knox
asked the Chancellor of the Exchequer by how much the standard rate of income tax rose or fell between November 1951 and October 1964, between November 1964 and June 1970, between July 1970 and February 1974 and between March 1974 and March 1977.

§ Mr. Robert Sheldon
The standard or basic rate of tax for the relevant fiscal years was as follows:

Date Standard rate Basic rate^*

November 1951 … 47.5 per cent. —

(9s. 6d. in the £)

October 1964 … 38.75 per cent. —

(7s. 9d. in the £) —

November 1964 … 38.75 per cent. —

(7s. 9d. in the £)

June 1970 … 41.25 per cent. —

(8s. 3d. in the £)

July 1970 … 41.25 per cent. —

(8s. 3d. in the £)

February 1974 … 30 per cent.

March 1974 … 30 per cent.

March 1977 … 35 per cent.

^* Basic rate from 1973–74 is not comparable with standard rate, owing to the operation of earned income relief (for earlier years) and investment income surcharge (from 1973–74).

§ Mr. Parkinson
asked the Chancellor of the Exchequer what amount of the estimated outturn of income tax for 1976–77 623W of £17,030 million, and the 1977–78 forecast of £18,065 million, relates to taxes at the higher rates.

§ Mr. Robert Sheldon
The tax at higher rates included in the estimated receipts of income tax for 1976–77 and the post-Budget forecast for 1977–78 is £2,380 million and £2,405 million respectively. These figures include the basic rate element of tax at the higher rates.

§ Mr. Lawson
asked the Chancellor of the Exchequer what would be the cost, both in 1977–78 and in a full year, of raising the P11 D limit, defining higher-paid employees for the purposes of Section 69 of the Finance Act 1976, from £5,000 to (a)£6,000, (b) £7,000 and (c) £8,000.

§ Mr. Robert Sheldon
, pursuant to his reply [Official Report, 4th April 1977; Vol. 929, c. 347], gave the following information:
Information on which to base precise figures is not available, but it is estimated that in a full year the cost would be about £7 million, £10 million and £12 million respectively. About two-thirds of the cost in each case would be incurred in the first year in which the charge was made.

§ Mr. Lawson
asked the Chancellor of the Exchequer, of the estimated outturn of income tax for 1976–77 of £17,030 million, and the 1977–78 forecast after all Budget changes including those of a conditional nature of £18,065 million, what amount relates in each case to tax at the higher rates.

§ Mr. Robert Sheldon
, pursuant to his reply [Official Report, 4th April 1977; Vol. 929, c. 347], gave the following information:
The tax at higher rates included in the estimated receipts of income tax for 1976–77 and the post-Budget forecast for 1977–78 is £2,380 million and £2,405 million respectively. These figures include the basic rate element of tax at the higher rates.

§ Mr. Lawson
asked the Chancellor of the Exchequer what is his estimate of the breakdown of the £2,293 million of income tax reliefs granted in his Budget between the amount that will accrue to taxpayers with incomes of £4,000 or less 624W and the amount that will accrue to those with incomes in excess of £4,000; and what the corresponding amount would have been merely to keep pace with inflation over the past 12 months.

§ Mr. Robert Sheldon
pursuant to his reply [Official Report, 4th April 1977; Vol. 929, c. 348], gave the following information:
It is not possible to give a breakdown by range of income for the £43 million tax relief relating to the treatment of foreign earnings, retirement annuities and savings bank interest, but for the remaining £2,250 million the figures are as follows:

Total net incomes^* £ m

Under £4,000 … … 796

£4,000 and above … … 1,454

On the basis of the increase in the retail price index between April 1976 and February 1977 expressed at an annual rate, the cost of revalorising the main tax allowances—excluding the child tax allowances—and the tax rate bands would have been about £1,620 million, broken down as follows:

Total net incomes^* £ m

Under £4,000 … … 570

£4,000 and above … … 1,050

^* Total net income is defined on page 35 of Inland Revenue Statistics 1976.

§ Mr. Patrick Jenkin
asked the Chancellor of the Exchequer how he proposes to compensate those parents of students over 19 years of age for the reduction in child tax allowances for the rest of the current academic year who do not qualify for the transitional relief set out in the reply by the Chief Secretary to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 29th March 1977.

§ Mr. Robert Sheldon
pursuant to his reply [Official Report, 4th April 1977; Vol. 929, c. 348], gave the following information:
As announced by my right hon. Friend the Secretary of State for Education and Science on 28th March, the parental contribution towards grant is to be adjusted from the beginning of the 1977–78 academic year to compensate for the reduction in child tax allowances. The adjustment will apply for the full academic year, corresponding with the tax year for which the allowance is reduced, and 625W will thus generally include a final term in the subsequent tax year for which the parent would not ordinarily in any event receive the child tax allowance since the child's income would exceed the income limit. Parents of students whose courses end this summer will not benefit from the adjustment, but similarly they would not ordinarily get the child tax allowance for 1977–78 owing to the size of the child's income.

§ Mr. Patrick Jenkin
asked the Chancellor of the Exchequer if a high income tax payer will be given the option, if it is to his advantage, of refusing the minimum grant of £80 for the next academic year and keeping the child tax allowance at the 1976–77 level.

Between: Change per lb

1st November 1951 and 31st October 1964 … … … … … … +17s. 2½d.

1st November 1964 and 30th June 1970 … … … … … … +£1 3s. 5½d.

1st July 1970 and 28th October 1964 … … … … … … -£0.7364^*

1st March 1974 and 31st March 1977 … … … … … … +£5.5228^**

^* Reflecting the abatement of the revenue duty following the introduction of V.A.T. on 1st April. 1973.

^** Including an estimate of the equivalent by weight of the excise duty on tobacco products in force at 31st March 1977, but excluding the increases in tobacco products duty announced in the Budget on 29th March 1977 which did not become effective until 4th April 1977 and which led to an estimated further increase of £1.2187 per lb.

Date		Standard rate	Basic rate^*
November 1951	…	47.5 per cent.	—
		(9s. 6d. in the £)
October 1964	…	38.75 per cent.	—
		(7s. 9d. in the £)	—
November 1964	…	38.75 per cent.	—
		(7s. 9d. in the £)
June 1970	…	41.25 per cent.	—
		(8s. 3d. in the £)
July 1970	…	41.25 per cent.	—
		(8s. 3d. in the £)
February 1974	…		30 per cent.
March 1974	…		30 per cent.
March 1977	…		35 per cent.
^* Basic rate from 1973–74 is not comparable with standard rate, owing to the operation of earned income relief (for earlier years) and investment income surcharge (from 1973–74).

Total net incomes^*			£ m
Under £4,000	…	…	796
£4,000 and above	…	…	1,454

Between:							Change per lb
1st November 1951 and 31st October 1964	…	…	…	…	…	…	+17s. 2½d.
1st November 1964 and 30th June 1970	…	…	…	…	…	…	+£1 3s. 5½d.
1st July 1970 and 28th October 1964	…	…	…	…	…	…	-£0.7364^*
1st March 1974 and 31st March 1977	…	…	…	…	…	…	+£5.5228^**
^* Reflecting the abatement of the revenue duty following the introduction of V.A.T. on 1st April. 1973.
^** Including an estimate of the equivalent by weight of the excise duty on tobacco products in force at 31st March 1977, but excluding the increases in tobacco products duty announced in the Budget on 29th March 1977 which did not become effective until 4th April 1977 and which led to an estimated further increase of £1.2187 per lb.