Taxation (Hansard, 6 April 1987)

§ Mr. Ralph Howell
asked the Chancellor of the Exchequer what would be the cost to the Exchequer of raising the tax threshold to (a) supplementary benefit levels, (b) supplementary benefit levels, including housing costs and (c) family income supplement levels.

§ Mr. Norman Lamont
Broad estimates of the direct revenue effect—in a full year at 1987–88 levels of income —of changing tax thresholds are as follows:

Taxpayers and income lax payable by range of total income¹, 1987–88

At basic rate At rates in excess over basic rate

Total income¹ Lower limit Number of tax units^{2 3} Amount of tax⁴ Number of tax units² Amount of tax Average rate of tax on all incomes Average tax on all incomes

£ pa millions £ billion millions £ billion per cent. £ thousand

2,425 3.2 0.9 0 0 7.5 280

5,000 3.2 2.4 0 0 12.5 740

7,000 4.4 5.2 0 0 140 1,200

10,000 5.3 9.7 0 0 15.0 1,850

15,000 2.7 7.5 0 0 16.5 2,800

20,000 1.6 7.3 0.6 0.2 19.5 4,650

30,000 0.8 7.6 0.6 2.9 31.0 14,150

All ranges 21.2 40.6 1.2 3.1 17.5 2,080

¹ Total income for income tax purposes.

² Counting married couples as one and combining their incomes.

³ Including taxpayers who also pay at higher rates.

⁴ Includes tax at composite rate.

§ Dr. McDonald
asked the Chancellor of the Exchequer if he will update, to take account of the 1987 Budget, the information on tax changes contained in his reply of 28 April 1986 to the hon. Member for Oldham, West (Mr. Meacher), Official Report, columns 326–8.
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Yield/Cost

(a) to supplementary benefit ordinary scale rates plus appropriate child additions Yield £6 billion

(b) to supplementary benefit ordinary scale rates plus appropriate child additions and average housing costs Cost £2¼ billion

(c) to family income supplement prescribed amounts for families with children and to levels increased by the same proportion for families without children Cost £6½ billion

Detailed costs of the changes relating to supplementary benefit could be made only at disproportionate cost because entitlement to supplementary benefit depends upon a range of factors related to individual family circumstances. In the above costings, income tax reliefs other than personal allowances have been assumed to remain unchanged.

§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing his forecast for 1987–88 of the amount of income tax payable by range of income on the same basis as that shown in table 5.11 of the latest edition of "Social Trends"; and if he will add a table for all indirect taxes, including rates.

§ Mr. Norman Lamont
The latest estimates are given in the table below. They are based on a projection of the 1984–85 survey of personal incomes and are therefore provisional. I regret that it is not possible to provide reliable estimates by income range in respect of indirect taxes or rates.

§ Mr. Norman Lamont
[pursuant to his reply, 25 March 1987, c. 216]: The information is given in the table.
69W

Gains from the Budget proposals for income tax allowances, rates, and thresholds compared with indexation by range of income

¹Range of gross income ²Tax units as percentage of total liable to tax Reduction in income tax liability in 1987–88 from Budget proposals compared with indexation

£ per year Per cent. Amount £ million As percentage of total Per cent.

Under 5,000 15 60 3

5,000 to 7,500 19 220 9

7,500 to 10,000 17 310 12

10,000 to 12,500 14 360 14

12,500 to 15,000 11 330 13

15,000 to 20,000 13 530 21

20,000 to 30,000 7 490 19

30,000 to 50,000 3 200 8

Above 50,000 1 30 1

All 100 2,530 100

¹ Income for income tax purposes

² That is counting married couples as one and combining their incomes.

§ Sir Russell Johnston
asked the Chancellor of the Exchequer what was the cost in lost tax revenue of an individual male and an individual female unemployed person in each of the past five years.

§ Mr. Norman Lamont
It is not possible to estimate the cost in lost tax revenue.

Taxpayers and income lax payable by range of total income¹, 1987–88
	At basic rate	At rates in excess over basic rate
Total income¹ Lower limit	Number of tax units^{2 3}	Amount of tax⁴	Number of tax units²	Amount of tax	Average rate of tax on all incomes	Average tax on all incomes
£ pa	millions	£ billion	millions	£ billion	per cent.	£ thousand
2,425	3.2	0.9	0	0	7.5	280
5,000	3.2	2.4	0	0	12.5	740
7,000	4.4	5.2	0	0	140	1,200
10,000	5.3	9.7	0	0	15.0	1,850
15,000	2.7	7.5	0	0	16.5	2,800
20,000	1.6	7.3	0.6	0.2	19.5	4,650
30,000	0.8	7.6	0.6	2.9	31.0	14,150
All ranges	21.2	40.6	1.2	3.1	17.5	2,080
¹ Total income for income tax purposes.
² Counting married couples as one and combining their incomes.
³ Including taxpayers who also pay at higher rates.
⁴ Includes tax at composite rate.

	Yield/Cost
(a) to supplementary benefit ordinary scale rates plus appropriate child additions	Yield £6 billion
(b) to supplementary benefit ordinary scale rates plus appropriate child additions and average housing costs	Cost £2¼ billion
(c) to family income supplement prescribed amounts for families with children and to levels increased by the same proportion for families without children	Cost £6½ billion

Gains from the Budget proposals for income tax allowances, rates, and thresholds compared with indexation by range of income
¹Range of gross income	²Tax units as percentage of total liable to tax	Reduction in income tax liability in 1987–88 from Budget proposals compared with indexation
£ per year	Per cent.	Amount £ million	As percentage of total Per cent.
Under 5,000	15	60	3
5,000 to 7,500	19	220	9
7,500 to 10,000	17	310	12
10,000 to 12,500	14	360	14
12,500 to 15,000	11	330	13
15,000 to 20,000	13	530	21
20,000 to 30,000	7	490	19
30,000 to 50,000	3	200	8
Above 50,000	1	30	1
All	100	2,530	100
¹ Income for income tax purposes
² That is counting married couples as one and combining their incomes.