§ Mr. SquireTo ask the Chancellor of the Exchequer what the savings would be if child benefit were taxed for(a) all taxpayers, (b) taxpayers on all the higher rates of tax and (c) taxpayers on the 60 per cent. rate of tax, in 1987–88 and in 1988–89.
§ Mr. Norman LamontThe direct revenue yield from taxing child benefit is estimated to be about £1,200 million in 1987–88 and 1988–89. If child benefit were taxable only for taxpayers whose marginal tax rate was higher than the basic rate, the yield would be expected to be about £150 501W million in 1987–88 and £170 million in 1988–89. It is tentatively estimated that the yield from taxing child benefit for top-rate taxpayers only is of the order of £20 million to £30 million in both years.
The estimates for 1988–89 assume no change to current tax rates and statutory indexation of allowances and thresholds.