Taxes (Hansard, 1 February 1995)

§ Sir George Young

[holding answer 25 January 1995]: The breakdown requested is in the table. Figures for council tax on a similar basis to those provided for other taxes will need to be estimated from family expenditure 667W survey data on actual council tax payments. At present we have figures only for such payments for the first nine months of its operation after April 1993. We need to investigate further to see whether this provides data of sufficient quantity and quality to enable reliable estimates to be made. I will write to the hon. Member as soon as I have further information on when these figures might be available.

Indirect taxes at multiples of average earnings 1993–94¹
	Percentages of average male earnings
	75	100	150
Single Amounts, £ per week
Gross income	269.33	359.10	538.65
VAT	14.81	19.77	30.37
Other indirect taxes	19.56	24.10	33.80
Total indirect taxes	34.37	43.86	64.17
Percentage of earnings
VAT	5.5	5.5	5.6
Other indirect taxes	7.3	6.7	6.3
Total indirect taxes	12.8	12.2	11.9
Married, no children Amounts, £ per week
Gross income	269.33	359.10	538.65
VAT	13.57	18.98	30.75
Other indirect taxes	21.93	26.55	36.62
Total indirect taxes	35.50	45.52	67.37
Percentage of earnings
VAT	5.0	5.3	5.7
Other indirect taxes	8.1	7.4	6.8
Total indirect taxes	13.2	12.7	12.5
Married, two children Amounts, £ per week
Gross income	269.33	359.10	538.65
VAT	13.44	19.56	32.89
Other indirect taxes	21.71	25.38	33.39
Total indirect taxes	35.15	44.94	66.28
Percentage of earnings
VAT	5.0	5.4	6.1
Other indirect taxes	8.1	7.1	6.2
Total indirect taxes	13.1	12.5	12.3
Married, two earners, no children: Earnings split 60:40
Amounts, £ per week
Gross income	269.33	359.10	538.65
VAT	15.64	21.53	33.25
Other indirect taxes	25.46	29.47	37.43
Total indirect taxes	41.10	51.00	70.68
Percentage of earnings
VAT	5.8	6.0	6.2
Other indirect taxes	9.5	8.2	6.9
Total indirect taxes	15.3	14.2	13.1
¹ Figures for indirect taxes are only shown for a narrow earnings range because the margin of error outside this range is too high to produce even illustrative estimates using the methods outlined in the notes below. Spending patterns vary widely between households with the same income and composition and all figures shown for indirect taxes are very approximate.

668W

Indirect taxes at multiples of average earnings 1994–95¹
	Percentages of average male earnings
	75	100	150
Single Amounts, £ per week
Gross income	278.78	371.70	557.55
VAT	16.40	21.70	32.97
Other indirect taxes	20.49	25.26	35.39
Total indirect taxes	36.89	46.96	68.35
Percentage of earnings
VAT	5.9	5.8	5.9
Other indirect taxes	7.4	6.8	6.3
Total indirect taxes	13.2	12.6	12.3
Married, no children Amounts, £ per week
Gross income	278.78	371.70	557.55
VAT	15.04	20.79	32.99
Other indirect taxes	22.77	27.63	37.92
Total indirect taxes	37.81	48.41	70.91
Percentage of earnings
VAT	5.4	5.6	5.9
Other indirect taxes	8.2	7.4	6.8
Total indirect taxes	13.6	13.0	12.7
Married, two children Amounts, £ per week
Gross income	278.78	371.70	557.55
VAT	14.89	21.43	35.32
Other indirect taxes	22.63	26.51	34.74
Total indirect taxes	37.52	47.94	70.06
Percentage of earnings
VAT	5.3	5.8	6.3
Other indirect taxes	8.1	7.1	6.2
Total indirect taxes	13.5	12.9	12.6
Married, two earners, no children: Earnings split 60:40
Amounts, £ per week
Gross income	278.78	371.70	557.55
VAT	17.19	23.49	35.97
Other indirect taxes	26.67	30.88	39.19
Total indirect taxes	43.86	54.37	75.16
Percentage of earnings
VAT	6.2	6.3	6.5
Other indirect taxes	9.6	8.3	7.0
Total indirect taxes	15.7	14.6	13.5
¹ Figures for indirect taxes are only shown for a narrow earnings range because the margin of error outside this range is too high to produce even illustrative estimates using the methods outlined in the notes below. Spending patterns vary widely between households with the same income and composition and all figures shown for indirect taxes are very approximate.

Indirect taxes at multiples of average earnings 1995–96¹
	Percentages of average male earnings
	75	100	150
Single Amounts, £ per week
Gross income	291.30	388.40	582.60
VAT	17.55	23.26	35.33
Other indirect taxes	21.74	26.86	37.65
Total indirect taxes	39.29	50.12	72.98
Percentage of earnings
VAT	6.0	6.0	6.1

669W

Indirect taxes at multiples of average earnings 1995–96¹
Percentages of average male earnings
	75	100	150
Other indirect taxes	7.5	6.9	6.5
Total indirect taxes	13.5	12.9	12.5
Married, no children Amounts, £ per week
Gross income	291.30	388.40	582.60
VAT	15.84	22.03	35.12
Other indirect taxes	23.96	29.14	40.11
Total indirect taxes	39.80	51.18	75.23
Percentage of earnings
VAT	5.4	5.7	6.0
Other indirect taxes	8.2	7.5	6.9
Total indirect taxes	13.7	13.2	12.9
Married, two children Amounts, £ per week
Gross income	291.30	388.40	582.60
VAT	15.55	22.59	37.47
Other indirect taxes	23.88	28.07	36.91
Total indirect taxes	39.43	50.66	74.38
Percentage of earnings
VAT	5.3	5.8	6.4
Other indirect taxes	8.2	7.2	6.3
Total indirect taxes	13.5	13.0	12.8
Married, two earners, no children: Earnings split 60:40
Amounts, £ per week
Gross income	291.30	388.40	582.60
VAT	18.08	24.87	38.31
Other indirect taxes	28.20	32.69	41.58
Total indirect taxes	46.29	57.56	79.88
Percentage of earnings
VAT	6.2	6.4	6.6
Other indirect taxes	9.7	8.4	7.1
Total indirect taxes	15.9	14.8	13.7
¹ Figures for indirect taxes are only shown for a narrow earnings range because the margin of error outside this range is too high to produce even illustrative estimates using the methods outlined in the notes below. Spending patterns vary widely between households with the same income and composition and all figures shown for indirect taxes are very approximate.

Notes to tables:

1. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1994–95 and 1995–96 are based on earnings growth assumptions of 3½ per cent. in 1994–95 and 4½ per cent. in 1995–96.
2. The estimates of indirect taxes shown exclude council tax, but include estimates of the impact of intermediate taxes on households as well as taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.
3. Estimates for most indirect taxes are based on equations derived from the 1985 family expenditure survey uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power, airline passenger duty and insurance premium tax are based on equations using results from the 1991 and 1992 family expenditure surveys uprated using a similar methodology. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
4. Estimates of indirect taxes are very approximate because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside
the range of earnings shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from family expenditure surveys for different years.
5. Net disposable income after income tax and national insurance is calculated on the assumption that the household receives no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay class 1 NI contributions at the contracted-in rate. Child benefit is treated as a negative income tax in order to provide comparability with support given through child tax allowances.