§ Mr. DewarTo ask the Chancellor of the Exchequer (1) if he will estimate the number of taxpayers who will be affected by the restriction of tax relief on the first £1,720 of maintenance payments to 20 per cent. in 1994–95 and 15 per cent. from 1995–96;
(2) what will be the effect on revenues in 1994–95 and in a full year of (a) restricting tax relief on maintenance payments up to £1,720 to 20 per cent. and (b) the withdrawal of relief on payments made to or for the benefit of children when they reach 21 years;
(3) what he estimates to be the effect on revenues in 1995–96 and in a full year of proposals to reduce tax relief on the first £1,720 of maintenance payments from 20 per cent. in 1994–95 to 15 per cent. in 1995–96.
§ Mr. Dorrell[holding answer 1 February 1994]: It is thought that some 400,000 people making maintenance payments may be affected, although payers who are liable to tax at the lower rate only will not be affected by the restriction of relief to 20 per cent. in 1994–95. Approximate estimates of the revenue effects of restricting the relief based on a projection of information from the 1991–92 survey of personal incomes are given below.
£ million Revenue yield in 1994–95 A full year Restriction to 20 per cent. 25 30 1995–96 A full year Further restriction to 15 per cent. 15 20 It is not possible to provide a precise estimate of the small yield from the withdrawal of relief on payments made to or for the benefit of children when they reach 21 years.