Taxes and Benefits

HC Deb 01 December 1989 vol 162 cc460-4W

Mr. Meacher

To ask the Chancellor of the Exchequer if he will give up-to-date figures on the same bases in his reply to the hon. Member for Hornchurch (Mr. Squire) on 10 January,Official Report, columns 633–56, including indirect taxation and including data for 1989–90.

Mr. Lilley

[holding answer 24 November 1989]: Figures for 1978–79 to 1988–89 were placed in the Library of the House earlier this year, as noted in the Official Report, 13 April 1989, column 624. Revised estimates for 1988–89, and estimates for 1989–90 are set out in the tables.

	0.5	0.75	1	1.5	2	3	4	5	7	10	20
Income Tax	0.0	8.2	12.4	16.6	19.1	22.5	25.4	28.2	31.6	34.1	37.0
NICS	6.2	8.2	8.2	9.0	9.0	7.1	5.4	4.3	3.1	2.1	1.1
VAT	—	5.1	5.4	5.6	—	—	—	—	—	—	—
Other indirect	—	10.2	9.0	7.7	—	—	—	—	—	—	—
Domestic rates	—	4.8	3.9	2.9	—	—	—	—	—	—	—
Total	6.2	36.5	38.9	41.8	28.0	29.7	30.7	32.5	34.6	36.2	38.1
Married, 2 children
Amounts, £ per week
Income Tax	-2.15	13.87	29.89	61.93	103.37	205.89	308.41	409.93	615.97	923.53	1,948.73
NICS	11.53	17.03	23.07	27.45	27.45	27.45	27.45	27.45	27.45	27.45	27.45
VAT	—	8.69	12.76	21.59	—	—	—	—	—	—	—
Other indirect	—	12.32	14.22	18.36	—	—	—	—	—	—	—
Domestic rates	—	7.42	8.85	11.96	—	—	—	—	—	—	—
Total	9.38	59.60	88.79	141.29	130.82	233.34	335.86	437.38	643.42	950.98	1,976.18
Percentage of earnings
Income Tax	-1.7	7.2	11.7	16.1	20.2	26.8	30.1	32.0	34.3	36.0	38.0
NICS	9.0	9.0	9.0	7.1	5.4	3.6	2.7	2.1	1.5	1.1	0.5
VAT	—	4.5	5.0	5.6	—	—	—	—	—	—	—
Other indirect	—	6.4	5.5	4.8	—	—	—	—	—	—	—
Domestic rates	—	3.9	3.5	3.1	—	—	—	—	—	—	—
Total	7.3	31.0	34.7	36.7	25.5	30.3	32.8	34.1	35.9	37.1	38.6

Income tax, NICS and indirect tax payments at multiples of average earnings, 1988.89
Multiples of Average Earnings
	0.5	0.75	1	1.5	2	3	4	5	7	10	20
Single
Amounts, £ per week
Income Tax	21.61	39.11	56.61	91.61	142.87	254.87	366.87	478.87	702.87	1,038.87	2,158.87
NICS	11.10	17.40	23.70	27.74	27.74	27.74	27.74	27.74	27.74	27.74	27.74
VAT	—	10.59	14.22	22.16	—	—	—	—	—	—	—
Other indirect	—	15.96	19.96	28.72	—	—	—	—	—	—	—
Domestic rates	—	8.42	10.25	14.25	—	—	—	—	—	—	—
Total	32.71	91.48	124.74	184.48	170.61	282.61	394.61	506.61	730.61	1,066.61	2,186.61
Amounts 1988–89 prices
Income Tax	20.10	36.38	52.66	85.22	132.90	237.09	341.27	445.46	653.83	966.39	2,008.25
NICS	10.33	16.19	22.05	25.80	25.80	25.80	25.80	25.80	25.80	25.80	25.80
VAT	—	9.85	13.23	20.61	—	—	—	—	—	—	—
Other indirect	—	14.85	18.57	26.72	—	—	—	—	—	—	—
Domestic rates	—	7.83	9.53	13.26	—	—	—	—	—	—	—
Total	30.43	85.10	116.04	171.61	158.71	262.89	367.08	471.27	679.64	992.20	2,034.06
Percentage of Earnings
Income Tax	15.4	18.6	20.2	21.8	25.5	30.3	32.8	34.2	35.9	37.1	38.6
NICS	7.9	8.3	8.5	6.6	5.0	3.3	2.5	2.0	1.4	1.0	0.5
VAT	—	5.0	5.1	5.3	—	—	—	—	—	—	—
Other indirect	—	7.6	7.1	6.8	—	—	—	—	—	—	—
Domestic rates	—	4.0	3.72	3.4	—	—	—	—	—	—	—
Total	23.4	43.6	44.6	43.9	30.5	33.6	35.2	36.2	37.3	38.1	39.0
Married, no children
Amounts, £ per week
Income Tax	13.97	31.47	48.97	83.97	130.63	242.633	354.63	466"63	690.63	1,026.63	2,146.63
NICS	11.10	17.40	23.70	27.74	27.74	27.74	27.74	27.74	27.74	27.74	27.74
VAT	—	9.73	13.69	22.33	—	—	—	—	—	—	—
Other indirect	—	17.67	21.68	30.42	—	—	—	—	—	—	—
Domestic rates	—	8.22	9.55	12.45	—	—	—	—	—	—	—
Total	25.07	84.49	117.59	176.91	158.37	270.37	382.37	494.37	718.37	1,054.37	2,174.37
Amounts 1988–89 prices
Income Tax	13.00	29.27	45.55	78.11	121.52	225.70	329.89	434.07	642.45	955.00	1,996.87
NICS	10.33	16.19	22.05	25.80	25.80	25.80	25.80	25.80	25.80	25.80	25.80
VAT	—	9.05	12.73	20.77	—	—	—	—	—	—	—
Other indirect	—	16.44	20.17	28.30	—	—	—	—	—	—	—
Domestic rates	—	7.65	8.88	11.58	—	—	—	—	—	—	—
Total	23.32	78.60	109.39	164.57	147.32	251.51	355.69	459.88	668.25	980.81	2,022.67

	0.5	0.75	1	1.5	2	3	4	5	7	10	20
Percentage of earnings
Income Tax	10.0	15.0	17.5	20.0	23.3	28.9	31.7	33.3	35.2	36.7	38.3
NICS	7.9	8.3	8.5	6.6	5.0	3.3	2.5	2.0	1.4	1.0	0.5
VAT	—	4.6	4.9	5.3	—	—	—	—	—	—	—
Other indirect	—	8.4	7.7	7.2	—	—	—	—	—	—	—
Domestic rates	—	3.9	3.4	3 0	—	—	—	—	—	—	—
Total	17.9	40.2	42.0	42.1	28.3	32.2	34.1	35.3	36.7	37.7	38.8
Married, both working
Amounts, £ per week
Income Tax	0.58	18.08	35.58	70.58	109.21	191.08	286.28	397.73	621.73	957.73	2077.73
NICS	9.59	15.89	22.19	34.79	46.40	55.49	55.49	55.49	55.49	55.49	55.49
VAT	—	10.96	15.25	32.83	—	—	—	—	—	—	—
Other indirect	—	20.40	24.00	31.19	—	—	—	—	—	—	—
Domestic rates	—	10.10	10.78	12.15	—	—	—	—	—	—	—
Total	10.17	75.43	107.80	172.54	155.61	246.57	341.77	453.22	677.22	1013.22	2133.22
Amounts 1988–89 prices
Income Tax	0.54	16.82	33.10	65.66	101.59	177.75	266.31	369.98	578.35	890.91	1932.77
NICS	8.92	14.78	20.64	32.36	43.16	51.62	51.62	51.62	51.62	51.62	51.62
VAT	—	10.20	14.19	22.17	—	—	—	—	—	—	—
Other indirect	—	18.98	22.33	29.01	—	—	—	—	—	—	—
Domestic rates	—	9.40	10.03	11.30	—	—	—	—	—	—	—
TOTAL	9.46	70.17	100.28	160.50	144.75	229.37	317.93	421.60	629.97	942.53	1984.39
Per cent, of earnings
Income Tax	0.4	8.6	12.7	16.8	19.5	22.7	25.6	28.4	31.7	34.2	37.1
NICS	6.9	7.6	7.9	8.3	8.3	6.6	5.0	4.0	2.8	2.0	1.0
VAT	—	5.2	5.4	5.7	—	—	—	—	—	—	—
Other indirect	—	9.7	88.6	7.4	—	—	—	—	—	—	—
Domestic rates	—	4.8	3.9	2.9	—	—	—	—	—	—	—
Total	7.3	35.9	38.5	41.1	27.8	29.4	30.5	32.4	34.6	36.2	38.1
Married, 2 Children
Amounts, £ per week
Income Tax	–0.53	16.97	34.47	69.47	116.13	228.13	340.13	452.13	676.13	1012.13	2132.13
NICS	11.10	17.40	23.70	27.74	27.74	27.74	27.74	27.74	27.74	27.74	27.74
VAT	—	9.60	14.08	23.87	—	—	—	—	—	—	—
Other indirect	—	17.36	20.58	27.64	—	—	—	—	—	—	—
Domestic rates	—	8.08	9.65	13.07	—	—	—	—	—	—	—
Total	10.57	69.41	102.48	161.79	143.87	255.87	367.87	479.87	703.87	1039.87	2159.87
Amounts 1988–89 prices
Income Tax	—0.49	15.79	32.07	64.62	108.03	212.21	316.40	420.59	628.96	941.52	1983.38
NICS	10.33	16.19	22.05	25.80	25.80	25.80	25.80	25.80	25.80	25.80	25.80
VAT	—	8.93	13.10	22.20	—	—	—	—	—	—	—
Other indirect	—	16.15	19.14	25.71	—	—	—	—	—	—	—
Domestic rates	—	7.52	8.98	12.16	—	—	—	—	—	—	—
Total	9.83	64.57	95.33	150.50	133.83	238.02	342.20	446.39	654.76	967.32	2009.18
Per cent, of earnings
Income Tax	-0.4	8.1	12.3	16.5	20.7	27.2	30.4	32.3	34.5	36.1	38.1
NICS	7.9	8.3	8.5	6.6	5.0	3.3	2.5	2.0	1.4	1.0	0.5
VAT	—	4.6	5.0	5.7	—	—	—	—	—	—	—
Other indirect	—	8.3	7.4	6.6	—	—	—	—	—	—	—
Domestic rates	—	3.8	3.4	3.1	—	—	—	—	—	—	—
Total	7.6	33.1	33.6	38.5	25.7	30.5	32.8	34.3	35.9	37.1	38.6

Notes:

1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances. Earners, including working wives, are assumed to pay class 1 NI contributions at the contracted in rate. The figures for NI contributions are financial year averages.

2. The two earner married couple is assumed to have combined earnings equal to the various multiples of average earnings. In calculating disposable income it is assumed that these earnings are split between husband and wife in the ratio 60:40.

3. For the married couple with two children, child benefit is treated as a negative income tax.

4. Average earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. These were £256.30 per week in 1988–89, and estimated to be £280.00 per week in 1989–90, using the Government Actuary Department's assumption of 9¼ per cent. growth over 1988–89 as published in the 1989 Autumn Statement.

5. The estimates of indirect taxes are derived from the 1985 Family Expenditure Survey, and are based on the illustrative assumption that 10 per cent. of disposable income is saved. There are wide variations in spending patterns between households with similar incomes and composition, and estimated payments of VAT, other indirect taxes and rates are therefore approximate, even within the income range for which figures are shown. Outside this range the margin of error is even higher and reliable estimates cannot be made. Because of sampling variation, there can be substantial differences between the estimates obtained from Family Expenditure Surveys for different years.

6. 1989–90 figures converted into 1988–89 prices by assuming that the RPI is 7½ per cent. higher in 1989–90 than the previous financial year. This is consistent with the forecasts published in the 1989 Autumn Statement.