§ Lord BOYD-CARPENTER
asked Her Majesty's Government:
Whether, taking into account the changes in United Kingdom taxation effected by the Finance Act 1977, they will publish in the Official Report a table showing what percentage of his income is retained after tax by a married man Avith two dependent children in the United Kingdom, the United States, France, West Germany, Italy and Canada with incomes of £5,000, £10,000, £15,000, £20,000 and £25,000 a year, assuming in all cases that these incomes are wholly earned.
§ The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)
The following is the information requested:—
deductions, tax-deductible social security contributions and reliefs for earned income or employment income (income is taken to be employment income where this is taxed more lightly than self-employment income).
FAMILY ALLOWANCES AND CHILD BENEFIT
4. The figures have been calculated on the assumption that "income" is equivalent 839WA lent to "earnings" (or in some cases, "income from employment"—see note 3). However, in all the countries in the table except the USA, the taxpayer in question would be entitled to family allowances or child benefit. No account has been taken of these allowances in the figures quoted. In Italy and Canada the allowances are taxable, and so it makes no difference to the proportion of income retained which is shown in the table whether income is taken to include family allowances or not. But in the United Kingdom, France and West Germany, family allowances (or child benefits) are tax free: accordingly the rates of retention shown in the table would be slightly increased if the allowances were included as part of pre-tax and post-tax income.
5. The dependent children are assumed to be aged under 11. The figures take account of the changes in personal allowances in Finance Act 1977 and of the increased personal allowances announced in the Chancellor's statement of 26th October.
LOCAL INCOME TAX
6. There is no local income tax in the United Kingdom or France; the local income tax in Italy and the local "Business Tax" in Germany do not apply to income from employment. The State income tax
1970 1971 1972 1973 1974 1975 1976 United Kingdom official reserves(1): average of end calendar month levels: US dollars million 2,736 4,261 6,495 6,408 6,836 6,309 5,404 £ millions(2) 1,142 1,732 2,608 2,609 2,905 2,853 3,002 Accruals to the reserves under the 25 per cent, surrender rule (£ millions) 87 128 138 158 265 180 176 Net overseas earnings of United Kingdom private financial institutions(3) (£ millions) 593 602 718 760 807 1,179 1,679 (1) The UK official holdings of gold, convertible currencies, Special Drawing Rights and, from July 1972, changes in the United Kingdom reserve position in the IMF. (2) Converted to sterling at middle market rates. (3) Includes net receipts for services rendered plus net receipts from investments in the form of interest, profits or dividends. The figure for 1976 differs from that given in Table 6.1 of United Kingdom Balance of Payments 1966–76 as it incorporates later information on the overseas earnings of insurance companies.