§ Mr. Chris Smithasked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing the number of taxpayers in each income group receiving relief on mortgage interest and the average relief per mortgagor, together with the assumed rate of interest for the financial year 1984–85.
§ Mr. MooreThe latest estimates are given in the following table. The figures are derived from a projection from the 1982–83 survey of personal income (the latest available), on the basis of interest rates prevailing during 1984–85. It has been assumed that the rates of interest, currently set by mortgagees will remain in force until the end of the fiscal year. The table does not include the relief given to former option mortgagors who are now included in the arrangements for giving mortgage interest relief at source. I regret that it is not possible to provide reliable estimates for this group in detail.
Taxpayers receiving mortgage interest relief and average relief by range of total income 1984–85 Range of total income (lower limit) Numbers receiving mortgage interest relief Average relief per mortgagor £ '000 £ 3,000 65 130 4,000 130 230 5,000 200 280 6,000 340 375 7,000 410 410 8,000 510 430 9,000 460 430 10,000 1,060 460 12,000 1,130 510 15,000 950 570 20,000 530 820 30,000 190 1,290
§ Mr. Chris Smithasked the Chancellor of the Exchequer what was the cost of relief on mortgage interest for each of the years from 1975–76 to 1983–84 and the estimated cost for 1984–85.
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§ Mr. MooreI regret the delay in obtaining the latest estimates, which are as follows. Figures for 1983–84 and 1984–85 are provisional.
Mortgage interest tax relief Total cost £ million 1975–76 895 1976–77 1,090 1977–78 1,040 1978–79 1,110 1979–80 1,450 1980–81 1,960 1981–82 2,050 1982–83 2,150 1983–84* 2,750 1984–85* 3,500 * Including the cost of relief in respect of mortgages previously under the option mortgage scheme.
§ Mr. Chris Smithasked the Chancellor of the Exchequer when he will be replying to the four questions about mortgage interest relief tabled by the hon. Member for Islington, South and Finsbury for answer on 11 January.
§ Mr. John MooreI regret the delay in providing replies to these questions. All four are being answered today.
§ Mr. Chris Smithasked the Chancellor of the Exchequer
(1) what would be the increased tax revenue if relief on mortgage interest payments were allowed only at the standard rate of tax;
(2) what would be the increased tax revenue if relief on mortgage interest payments was allowable only at each of the following rates of taxation (a) 25 per cent., (b) 20 per cent. and (c) 15 per cent.;
(3) how many persons currently receive mortgage tax relief at above the standard rate of tax; and what is the annual cost to the Exchequer of this relief;
(4) how many persons currently paying tax only at standard rate would pay tax at a higher rate if mortgage tax relief were removed from higher rates of tax; and what would be the additional income to the Exchequer.
§ Mr. MooreI regret the delay in providing this information. Estimates of the direct revenue yields in a full year from restricting mortgage interest relief at 1984–85 levels of mortgage lending are shown as follows. The figures do not take account of possible changes in taxpayers' behaviour.
Rate of mortgage interest relief Direct revenue yield per cent. £ million 15 1,840 20 1,290 25 730 30 180 About 700,000 mortgagors receive relief at rates in excess of the basic rate of income tax. Of these, about 190,000 who are currently liable only at the basic rate are kept out of higher rates by virtue of relief on their mortgage interest.