§ Mr. Ralph Howellasked the Chancellor of the Exchequer what are the starting tax rates, the tax thresholds, and the highest tax rates for Switzerland and Jersey.
§ Mr. RidleyThe information requested is given in the following table:
Starting tax rate Tax threshold/exemption limit Highest tax rate per cent. £ per cent. Switzerland Federal 0.88 4,205 See note 5 Zurich* 5.36 2,260 34.84 Berne* 7.52 1,725 31.72 Geneva* 1.23 1,710 37.05 Jersey See notes 7 and 8 4,700 20 * Combined canton and city. Notes:
1. The table is based on the latest available published information.
2. The rates and thresholds are for a married couple, and the income is assumed to be wholly employment income of the husband.
Switzerland
3. The rates and thresholds take account of personal reliefs, universal minimum deductions for expenses, employment reliefs and other standard reliefs. The starting income tax rates shown are the actual rates at which tax would start to be paid. Because of the various reliefs mentioned above these rates may differ from the nominal starting rates in the Statutory income tax scales.
4. Each of the 26 cantons has its own income tax system which is independent of, and additional to, the Federal income tax system. Income tax is also levied on behalf of local authorities, based on the appropriate cantonal tax system. As examples of these cantonal and local authority income taxes, combined tax rates and thresholds are shown for the capital cities of the cantons of Zurich, Berne and Geneva.
5. Under the Swiss federal tax rate schedules, for incomes exceeding £116,935 both the average and marginal tax rates are 11.5 per cent. At lower points on the income scale the average rate is less than 11.5 per cent., but the tax due is calculated in such a way that over a broad band of income the marginal rate is 13.2 per cent.
6. Conversions of Swiss francs to sterling were made at the exchange rate prevailing on 6 December 1982. This may not fully reflect differences in purchasing power between sterling and Swiss francs.
Jersey
7. The figure given is the "exemption limit" for a married couple. Immediately above that limit income tax may not exceed 30 per cent. of the difference between total income and the exemption limit, if that is less than tax calculated on the normal basis. Since the ordinary personal allowances are substantially less than the corresponding exemption limit, the effective starting rate for tax for an income just above the exemption limit is 30 per cent.
8. The nominal starting rate in Jersey is 10 per cent. and the standard rate 20 per cent. There are no higher rates except the marginal relief rate of 30 per cent. described above.