§ Mr. Hordern
asked the Chancellor of the Exchequer if he will estimate how many people would be taken out of tax, and at what cost to the Exchequer, if personal allowances were increased by (a) 5 per cent., (b) 10 per cent., (c) 15 per cent. and (d) 20 per cent.
§ Mr. Moore
Estimates are in the following table. All comparisons are made against indexation of allowances, thresholds and rate bands by 4.6 per cent. in 1985–86.
Increase in personal allowances above indexation (as percentage of 1984–85 levels) Numbers of taxpayers taken out of tax Direct revenue cost (£ million at forecast 1985–86 income levels) (per cent.) (thousand) 1985–86 Full year 5 450 780 975 10 850 1,540 1,915 15 1,260 2,290 2,850 20 1,670 3,040 3,780
§ Mr. Silvester
asked the Chancellor of the Exchequer how much would be transferred to non-taxpayers if the value of the married personal allowance and the additional personal allowance were used to increase child benefits; and what proportion of that value this transfer represents.
§ Mr. Moore
[pursuant to his reply, 21 January 1985, c. 320]: The estimated yield from the allowance changes would total about £4,240 million at 1984–85 income levels, as detailed in replies I gave to my hon. Friend on 22 January 1985 at column 365. About £150 million of this yield would be extra tax from people who currently have no tax liability. If the whole of the £4,240 million were used to increase child benefit—and the scale rates of supplementary benefit for dependent children by a similar amount—then families with children who currently pay no tax would receive about £600 million, some 14 per cent. of the total. The net benefit to non-taxpayers as a group — including those without children — would therefore be about £450 million.