§ Ms EagleTo ask the Chancellor of the Exchequer what estimate he has made of the savings from restricting all tax allowances and reliefs to(a) a 25 per cent. rate of tax and (b) a 20 per cent. rate of tax, showing the amounts for each allowance and relief.
§ Mr. Dorrell[holding answer 15 July 1993]: The estimated full-year yields at 1993–94 income levels are shown in the table.
£ million Restriction to 25 per cent. 20 per cent. All allowances and reliefs 2,400 8,900 Personal allowance (excluding age related addition) 1,000 5,200 Married couple's allowance (excluding age related addition) 320 1,100 Age allowance1 — 100 Mortgage interest relief2 — 860 Pension contribution reliefs3 470 1,000 1 The higher levels of the age-related personal and married couple's allowance given to those aged 65 and over, subject to the income limit. 2 Mortgage interest relief is currently restricted to the basis rate of tax. The yield from restricting the relief to 20 per cent, is based on the conventional assumption that interest rates remain at their current levels. 3 Employees' contributions to occupational pension schemes and contributions to personal pensions including retirement annuity premia and free standing additional voluntary contributions. No account has been taken of possible behavioural changes resulting from such restrictions. Figures for the major allowances and reliefs show the yield from restricting each allowance or relief separately. If two or more were restricted, the total yield would be greater than the sum of the figures for individual allowances.
699W