§ Mr. DewarTo ask the Chancellor of the Exchequer how many taxpayers pay income tax at the rate of 20 per cent. only; and what is their average(a) gross and (b) taxable income.
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§ Mr. DorrellLatest estimates for 1992–93 indicate that about 4.4 million taxpayers pay income tax only at the lower rate of 20 per cent. Their average gross income is £5,400 and their average taxable income is £930.
§ Mr. DewarTo ask the Chancellor of the Exchequer if he will estimate the revenue yield from non-indexation of the basic rate limit for income tax in 1993–94 and in a full year; and what would be the increase in the lower rate band which could be financed by this amount.
§ Mr. DorrellCompared with 2.6 per cent. indexation, the yield would be about £110 million in 1993–94, £180 million in a full year. For an equivalent cost in a full year the lower rate band could be increased by about £200.
§ Mr. DewarTo ask the Chancellor of the Exchequer what evidence he has from local tax offices of employers not operating PAYE systems properly and failing to take into account the lower rate band of income tax when calculating tax deductions; and what has been done to rectify this situation.
§ Mr. DorrellThe Inland Revenue became aware during the first half of the 1992–93 financial year that not all employers were taking the lower rate band into account in operating PAYE. In October 1992, local tax offices were advised on how to help these employers apply the tax tables correctly. These efforts have been reinforced by national press coverage of the topic in December 1992 following a local tax office initiative.