Tax Bands (Hansard, 2 November 1995)

§ Mr. Nigel Griffiths
To ask the Chancellor of the Exchequer what would be the cost in a full year of introducing a new 30 per cent. tax band on £3,000 of income above the basic rate band; and what would be the yield from introducing a 60 per cent. upper rate at a 40 per cent. rate limit of(a) £50,000, (b) £70,000 and (c) 100,000. [39105]

§ Mr. Jack
The full-year cost of introducing the 30 per cent. band at 1996–97 levels would be about £590 million compared with an indexed tax regime.
The table gives the yield from introducing a new top rate of tax of 60 per cent. for taxable income above £50,000, £70,000 and £100,000. These estimates do not allow for any behavioural changes that might result from the introduction of the new tax rate.

Lower limit of taxable income for 60 per cent, rate £ Full year revenue yield at 1996–97 levels¹ (£ billion)

50,000 4.3

70,000 3.1

100,000 2.2

¹ The figures include consequential effects on the yield of capital gains tax.

§ Mr. Griffiths
To ask the Chancellor of the Exchequer how many people are liable for income tax at the higher level; how many people would be taken out of higher rate tax if the basic rate limit was raised by(a) £500, (b) £1,000, (c) £1,500, (d) £2,000, (e) £2,500, (f) £3,000, (g) £3,500, (h) £4,500 (i) £5,000; and how much of the revenue cost of such a measure would be in 1996–97 and 1997–98 after indexation. [39097]

§ Mr. Jack
It is estimated that there will be 2.2 million higher rate taxpayers in 1995–96. Providing all of the details sought would involve disproportionate cost. The table gives available estimates for 1996–97 showing the 427W variation in the revenue costs and the numbers of people affected over the range of specified increases in the basic rate limit.

Increasing the basic rate limit by¹ Full year revenue cost at 1996–97 levels² Number of people taken out of higher rate

£ £ million thousands

500 170 100

2,500 770 450

5,000 1,400 760

¹ Compared to an indexed 1995–96 regime.

² The estimates include consequential effects on capital gains tax. They do not take into account any behavioural changes which might result from the introduction of the new regime.

Lower limit of taxable income for 60 per cent, rate £	Full year revenue yield at 1996–97 levels¹ (£ billion)
50,000	4.3
70,000	3.1
100,000	2.2
¹ The figures include consequential effects on the yield of capital gains tax.

Increasing the basic rate limit by¹	Full year revenue cost at 1996–97 levels²	Number of people taken out of higher rate
£	£ million	thousands
500	170	100
2,500	770	450
5,000	1,400	760
¹ Compared to an indexed 1995–96 regime.
² The estimates include consequential effects on capital gains tax. They do not take into account any behavioural changes which might result from the introduction of the new regime.