HC Deb 30 April 1996 vol 276 cc437-8W
Mr. Forman

To ask the Chancellor of the Exchequer, pursuant to his answer of 18 March,Official Report, column 52, what would be the estimated full-year costs at 1996–97 income levels of introducing a single positive rate of income tax at 23 per cent. assuming transferable personal allowances of £5,000 per person and the abolition of all other tax expenditures, exemptions and reliefs now allowable against income tax. [27242]

Mr. Jack

The estimated full-year cost of introducing a single 23 per cent. rate of income tax at 1996–97 income levels would be about £3 billion. This assumes a personal allowance of £5,000 transferable between spouses and the abolition of all other income tax allowances, mortgage interest relief, tax relief on employer's contributions to occupational and personal pension schemes, reliefs for TESSAs, PEPs and profit-related pay, national savings certificates, employee share schemes and charitable giving.

This estimate does not take into account the substantial behavioural effects which might result from the introduction of such a change nor do they allow for any subsequent changes to the tax system, such as changes to tax relief on employer's contributions to pension schemes or relief for investment income in pension funds.

Mr. Nigel Evans

To ask the Chancellor of the Exchequer what is his estimate of the change in revenue to the Exchequer resulting from a rise in the top rate of income tax from(a) 40 per cent. to 50 per cent. and (b) from 40 per cent. to 60 per cent. [26762]

Mr. Jack

[holding answer 25 April 1996]:Estimated full-year yields at 1996–97 income levels are given in the table. The estimates do not take account of any behavioural effects which might result from the introduction of such changes. The figures include consequential effects on the yield of capital gains tax.

Higher rate at: Yield £ billion
50 per cent. 4.7
60 per cent. 9.3

Mr. Malcolm Bruce

To ask the Chancellor of the Exchequer what estimate he has made of the yield from higher rate income tax charged by direct assessment on investment income received net of lower rate income tax in the latest year for which figures are available. [27033]

Mr. Jack

[holding answer 26 April 1996]: In 1995–96, £1.2 billion tax was collected via assessments for additional tax on investment income from which tax had already been deducted at source.