Income Tax (Hansard, 28 January 1997)

§ Mr. Malcolm Bruce
To ask the Chancellor of the Exchequer if he will estimate the(a) first year and (b) full year cost of raising the personal income tax allowances in 1997–98 by (i) £175, (ii) £190 and (iii) £200; and if he will estimate in each case the number of individuals who would cease to be liable to pay income tax as a consequence of such a change. [12747]

§ Mr. Jack
[holding answer 27 January 1997]: Available information is given in the table.

Increase in non-aged and aged personal tax allowances £ Full year cost at 1997–98 income levels¹ £ million First year cost at 1997–98 income levels £ million Number of taxpayers taken out of income tax (thousands)

175 1,050 790 400

190 1,150 850 440

200 1,200 900 470

¹ Based on the Budget forecast.

§ Mr. Bruce
To ask the Chancellor of the Exchequer if he will estimate the impact on revenue of ending the tax reliefs on(a) new personal equity plans and (b) new tax-exempt special savings accounts in (i) 1997–98 and (ii) 1998–99. [12796]

§ Mr. Jack
[holding answer 27 January 1997]: The reduction in the cost of tax relief from not permitting any further investment in personal equity plans is tentatively estimated at £40 million for 1997–98.
The estimated reduction in the cost of income tax relief from not allowing new tax-exempt special savings accounts is about £50 million for 1997–98. The estimated reduction in the cost of tax relief from not permitting any further investment in TESSAs is approximately £80 million for 1997–98.
These estimates do not allow for any behavioural consequences as a result of changes to these tax reliefs, and follow the conventional assumption that the current interest rates remain unchanged.
Estimates for later years are not available, but in each case the effect would build up over time.

§ Mr. Bruce
To ask the Chancellor of the Exchequer if he will estimate the additional revenue which would be raised by the Exchequer in(a) 1997–98 and (b) 1998–99 by introducing a new marginal tax rate of 50 per cent. on 143W taxable incomes of £100,000 per annum and over; and what is his estimate of the number of individuals who would be affected by such a policy. [12746]

§ Mr. Jack
[holding answer 27 January 1997]: The estimated full year yield at 1997–98 income levels of introducing a new rate of 50 per cent. on taxable incomes above £100,000 is £1.4 billion. The yield includes the consequential effects on the yield of capital gains tax after allowing for likely changes in the volume of disposals. It does not take account of any other behavioural effects which might result from the introduction of the new rate of tax. About 140,000 taxpayers would be affected.
The yield for future years would depend on levels of income, tax reliefs and allowances in those years.

§ Mr. Bruce
To ask the Chancellor of the Exchequer if he will estimate the additional revenue which would be raised by the Exchequer in(a) 1997–98, (b) 1998–99 and (c) 1999–2000 by increasing the basic rate of tax by one penny in the pound. [12745]

§ Mr. Jack
[holding answer 27 January 1997]: The estimated full year yield would be about £1.7 billion at 1997–98 income levels. The yields for future years would depend on the levels of incomes, tax reliefs and allowances in those years.

§ Mr. Gordon Prentice
To ask the Chancellor of the Exchequer what estimate he has made of the additional revenues which would be generated by a top rate of income tax of(a) 50 per cent. and (b) 60 per cent. on incomes over (i) £50,000, (ii) £60,000, (iii) £70,000, (iv) £100,000 and (v) £150,000. [12377]

§ Mr. Jack
Estimated full year yields at 1997–98 income levels are given in the table. The yields include the consequential effects on the yield of capital gains tax after allowing for likely changes in the volume of disposals. They do not take account of any other behavioural effects which might result from the introduction of such changes. It is not possible to provide a reliable estimate of the effect of introducing the higher tax rates for taxable incomes over £100,000.

Full year revenue yield at 1997–98 income levels Top rate

Lower limit of taxable income £ 50 per cent. £ billion 60 per cent. £ billion

50,000 2.7 5.4

60,000 2.3 4.5

70,000 2.0 3.9

100,000 1.4 2.7

Increase in non-aged and aged personal tax allowances £	Full year cost at 1997–98 income levels¹ £ million	First year cost at 1997–98 income levels £ million	Number of taxpayers taken out of income tax (thousands)
175	1,050	790	400
190	1,150	850	440
200	1,200	900	470
¹ Based on the Budget forecast.

	Full year revenue yield at 1997–98 income levels Top rate
Lower limit of taxable income £	50 per cent. £ billion	60 per cent. £ billion
50,000	2.7	5.4
60,000	2.3	4.5
70,000	2.0	3.9
100,000	1.4	2.7