§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer whether he will publish in the Official Report a table comparing information available to him on the allowances and reliefs given to single persons and one and two-earner married couples in Germany with those given in the United Kingdom together with the width of the income band at each rate of income tax chargeable.
§ Mr. Norman Lamont
[pursuant to his reply, 21 October 1987]: The information requested is given in the tables, which are supplemented by explanatory notes.861W
United Kingdom Germany £ £ (see note 1) (b) Minimum deduction for employment expenses, given to all employees, regardless of whether any such expenses are incurred or not. Single person and one-earner married couple 125 Two-earner married couple 250 (c) Employment income deduction Single person and one-earner married couple 105 Two-earner married couple 210 (d) Christmas allowance, given against end of year pay Single person and one-earner married couple 130 Two-earner married couple 260 (e) Minimum deduction for certain personal expenditures (regardless of whether any are incurred) eg donations, church taxes etc Single persons 60 Married couple 120 (f) (Complex) minimum deduction for "provident expenses" eg Social Security contributions, life assurance premiums etc. Minimum deduction 18 per cent of gross earnings less Christmas allowances (see (d))—all employees
1. Conversions from DM to £ sterling have been made on the basis of the latest available OECD estimates of purchasing power parity.
2. In Germany the principal relief for married couples is the "income splitting" system which normally reduces the tax payable by a married couple.
3. In Germany there are also child allowances, single-parent allowances, and various other comparatively minor personal allowances.
Table 2 Income Tax Scales United Kingdom (all taxpayers) Germany (single persons —see Note 3 remarried couples) Rate per cent Band of taxable income Rate per cent Band of taxable income £ £ 27 1–17,900 0 1–990 40 17,901–20,400 (see table 1—zero bracket amount) 45 20,401–25,400 22 990–1,750 50 25,401–33,300 22–56 1,750–28,840 55 33,301–41,200 (see note 2) 60 over 41,200 56 over 28,840
1. Conversions from DM to £ sterling have been made on the basis of the latest available OECD estimate of purchasing power parity.
2. The tax in this band is computed by complicated arithmetical formulas, which have the effect of progressively increasing the marginal rate from just over 22 per cent, to just under 56 per cent.
3. As mentioned in note 2 to table 1, married couples are normally taxed on the income-splitting system. This will have the effect of doubling all the taxable income figures in this table for such married couples.