§ Mr. Meacherasked the Chancellor of the Exchequer, pursuant to the reply of 17 November 1986, Official Report, column 84, regarding the latest estimates of revenue raised by taxing benefits to the unemployed, when the hon. Member for Oldham, West can expect to receive the letter containing the relevant information.
§ Mr. Norman LamontI regret the delay in providing revised estimates of the yield from taxing benefits paid to the unemployed.
Revised estimates are as follows:
£ million 1982–83 1300 1983–84 375 1984–85 400 1985–86 400 1986–87 400 1Unemployment benefits became taxable on 5 July 1982. Revenue received from the taxation of benefits paid to the unemployed is not separately identifiable in the collection of tax. Therefore, estimates of the yield are produced by using information on total benefits paid, periods of unemployment, income from employment and tax allowances and reliefs.
Previous estimates were based on aggregate information from several sources and used very broad assumptions. They were subject to wide margins of error. The revised estimates are based on national amounts of benefits paid to the unemployed and information about the individual circumstances of the unemployed respondents to the "Family Expenditure Survey" (FES). From this detailed information, average marginal rates of tax haw been estimated and applied to the national levels of benefits paid. The revised estimates were derived using the 1984 FES and may be further revised when later information becomes available.