§ Mr. Denzil Daviesasked the Chancellor of the Exchequer how many wage earners did not pay income tax on their earnings in the last financial year; and what is the estimate for the present financial year.
§ Mr. Peter ReesI shall let the right hon. Gentleman have a reply as soon as possible.
§ Mr. Mike Thomasasked the Chancellor of the Exchequer what is his estimate of the numbers who will benefit, the total cost and the average benefit per 677W individual in each of the following tax changes he has made: (a) reducing the top rate of tax to 60 per cent., (b) raising the threshold for higher rates to £10,000, (c) altering the rate scales between £10,000 and £25,000,(d) raising each of the allowances he has raised,(e) reducing the standard rate to 30 per cent. and (f) raising the threshold for investment income surcharge.
Cost in a full year Estimated numbers benefiting Average benefit £ million '000 £ Increase in personal allowances and in income limit for age allowance … … … … … … … 2,068 21,900 94 Reduction of basic rate to 30 per cent. … … … … 1,395 18,500 75 Increase in threshold for higher rates to £10,000 … … 200 1,100 180 Reduction of top rate to 60 per cent. … … … … 344 240 1,400 Other changes to higher rates and bands … … … 318 660 480 Changes to investment income surcharge threshold and abolition of 10 per cent. rate … … … … … 201 840 240
§ Mr. Kaufmanasked the Chancellor of the Exchequer what is the total number of income tax payers; how many of these will benefit from the reduction in the top rate from 83 to 60 per cent. and the raising of the higher rate scale threshold from £8,000 to £10,000; and out of the total cost of income tax reductions in a full year of £4,540 million, how much in total will accrue to those benefiting from the above concessions, taking into account not only those concessions but also the increase in personal allowances and reduction in the basis rate of income tax.
§ Mr. Peter Rees, pursuant to his reply [Official Report, 18 June 1979], gave the following answer:
Counting married couples as one, it is estimated that there will be 21,100,000 taxpayers in 1979–80 after the Budget measures have taken effect.
About 240,000 taxpayers benefit from the reduction of the maximum rate to 60 per cent. and about 1,110,000 from the increase in the starting point of the higher rates to £10,000.
The total benefit to these taxpayers, from the main income tax proposals in the Budget, including the increases in personal allowances, the reduction in the basic rate, the changes in the higher rate bands and the changes in the investment income surcharge, is approximately £1,400 million in a full year.
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§ Mr. Peter Rees, pursuant to the reply [Official Report, 18 June 1979], gave the following answer:
The numbers benefiting and the costs of changes depend on the order in which it is assumed that the changes are made.
Adopting the order shown in table 16 of the Financial Statement and Budget Report and counting married couples as one, the figures are:
§ Mr. Michael Brownasked the Chancellor of the Exchequer what would be the additional cost to the Treasury of a reduction in income tax from 30 pence to (a) 28 pence, (b) 27 pence, (c) 26 pence, (d) 25 pence and (e) 20 pence.
§ Mr. Peter Rees, pursuant to his reply [Official Report, 18 June 1979], gave the following answer:
After taking account of the Budget proposals the estimated full year cost of a penny reduction in the basic rate is about £480 million. The reductions in question would therefore cost about:
Basic Rate and Full Year Cost £ million 28 per cent. 960 27 per cent. 1,440 26 per cent. 1,920 25 per cent. 2,400 20 per cent. 4,800