Income Tax

HC Deb 05 June 1998 vol 313 cc386-90W

Mr. MacShane

To ask the Chancellor of the Exchequer, pursuant to his answer of 20 April 1998,Official Report, columns 400–02, concerning income tax, national insurance and child benefits, if he will provide comparable figures for (a) the tax year 1998–99 and (b) the second half of 1999–2000 on the basis of the figures used in the Financial Statement and Budget Report. [42670]

Dawn Primarolo

The information requested, including Family Credit or Working Families Tax Credit for the different family types, is contained in the table. The childcare tax credit within the WFTC will also provide substantial help for working families. For example, a family with one child could receive up to £70 per week towards childcare costs, and up to £105 a week for families with more than one child.

Gross income	150	200	250	300	400
Lone Parent (1 child aged 4 years)—lone parent from before April 1998, so still receiving lone parent benefit
National Insurance	9.88	14.88	19.88	24.88	34.88
Income Tax	8.38	19.48	30.98	42.48	65.48
Child Benefit	17.10	17.10	17.10	17.10	17.10
Family Credit	37.54	13.80	0.00	0.00	0.00
Tax and NICs, less child benefit and family credit, as a percentage of gross earnings	-24.2	1.7	13.5	16.8	20.8
Net Income	186.37	196.54	216.24	249.74	316.74
Equivalised Net Income	235.91	248.79	273.72	316.12	400.93
Lone Parent (2 children aged 4 years and 6 years)—new lone parent since April 1998, not receiving lone parent benefit
National Insurance	9.88	14.88	19.88	24.88	34.88
Income Tax	8.38	19.48	30.98	42.48	65.48
Child Benefit	20.75	20.75	20.75	20.75	20.75
Family Credit	52.39	28.65	5.20	0.00	0.00
Tax and NICs, less child benefit and family credit, as a percentage of gross earnings	-36.6	-7.5	10.0	15.5	19.9
Net Income	204.87	215.04	225.09	253.39	320.39
Equivalised Net Income	204.87	215.04	225.09	253.39	320.39
Lone Parent (2 children aged 4 years and 6 years)—lone parent from before April 1998, so still receiving lone parent benefit
National Insurance	9.88	14.88	19.88	24.88	34.88
Income Tax	8.38	19.48	30.98	42.48	65.48
Child Benefit	26.10	26.10	26.10	26.10	26.10
Family Credit	52.39	28.65	5.20	0.00	0.00
Tax and NICs, less child benefit and family credit, as a percentage of gross earnings	-40.1	-10.2	7.8	13.8	18.6
Net Income	210.22	220.39	230.44	258.74	325.74
Equivalised Net Income	210.22	220.39	230.44	258.74	325.74
Single Earner Married Couple (1 child aged 4 years)
National Insurance	9.88	14.88	19.88	24.88	34.88
Income Tax	8.38	19.48	30.98	42.48	65.48
Child Benefit	11.45	11.45	11.45	11.45	11.45
Family Credit	37.54	13.80	0.00	0.00	0.00
Tax and NICs, less child benefit and family credit, as a percentage of gross earnings	-20.5	4.6	15.8	18.6	22.2
Net Income	189.66	192.53	210.59	244.09	311.09
Equivalised Net Income	160.73	163.16	178.46	206.85	263.63
Single Earner Married Couple (2 children aged 4 and 6)
National Insurance	9.88	14.88	19.88	24.88	34.88
Income Tax	8.38	19.48	30.98	42.48	65.48
Child Benefit	20.75	20.75	20.75	20.75	20.75
Family Credit	52.39	28.65	5.2	0.00	0.00
Tax and NICs, less child benefit and family credit, as a percentage of gross earnings	-36.6	-7.5	10.0	15.5	19.9
Net Income	214.10	216.95	225.09	253.39	320.39
Equivalised Net Income	154.03	156.08	161.94	182.29	230.49
With Budget measures coming into effect in 1999
These figures include the effect of Budget measures coming into effect in 1999—using otherwise non-uprated 1998–99 tax and benefit rates
Single Person—no children
National Insurance	8.6	13.60	18.60	23.60	33.60
Income Tax	13.87	24.96	36.46	47.96	70.96
Tax and NICs, less child benefit and WFTC, as a percentage of gross earnings	15.0	19.3	22.0	23.9	26.1
Net Income	127.53	161.44	194.94	228.44	295.44
Equivalised Net Income	209.07	264.65	319.57	374.48	484.32
Lone Parent (1 child aged 4 years)—new lone parents since April 1998, not receiving lone parents benefit
Equivalisation Factor	0.79	0.79	0.79	0.79	0.79
National Insurance	8.60	13.60	18.60	23.60	33.60
Income Tax	10.21	21.31	32.81	44.31	67.31
Child Benefit	13.95	13.95	13.95	13.95	13.95
WFTC	51.80	33.15	14.73	0.00	0.00
Tax and NICs, less child benefit and WFTC, as a percentage of gross earnings	-31.3	-6.1	9.1	18.0	21.7
Net Income	196.93	212.19	227.27	246.04	313.04
Equivalised Net Income	249.28	268.60	287.68	311.44	396.25
Lone Parent (1 child aged 4 years)—lone parent from before April 1998, so still receiving lone parent benefit
National Insurance	8.60	13.60	18.60	23.60	33.60
Income Tax	10.21	21.31	32.81	44.31	67.31
Child Benefit	17.10	17.10	17.10	17.10	17.10
WFTC	51.80	33.15	14.73	0.00	0.00
Tax and NICs, less child benefit and WFTC, as a percentage of gross earnings	-33.4	-7.7	7.8	16.9	21.0
Net Income	200.08	215.34	230.42	249.19	316.19
Equivalised Net Income	253.27	272.58	291.66	315.43	400.24

Gross income	150	200	250	300	400
Lone Parent (2 children aged 4 years and 6 years)—new lone parents since April 1998, not receiving lone parents benefit
National Insurance	8.60	13.60	18.60	23.60	33.60
Income Tax	10.21	21.31	32.81	44.31	67.31
Child Benefit	23.25	23.25	23.25	23.25	23.25
WFTC	66.65	48.00	29.58	11.15	0.00
Tax and NICs, less child benefit and WFTC, as a percnetage of gross earnings	-47.4	-18.2	-0.6	11.2	19.4
Net Income	221.08	236.34	251.42	266.49	322.34
Equivalised Net Income	221.08	236.34	251.42	266.49	322.34
Lone Parent (2 children aged 4 years and 6 years)—lone parent from before April 1998, so still receiving lone parent benefit
National Insurance	8.60	13.60	18.60	23.60	33.60
Income Tax	10.21	21.31	32.81	44.31	67.31
Child Benefit	26.10	26.10	26.10	26.10	26.10
WFTC	66.65	48.00	29.58	11.15	0.00
Tax and NICs, less child benefit and WFTC, as a percentage of gross earnings	-49.3	-19.6	-1.7	10.2	18.7
Net Income	223.93	239.19	254.27	269.34	325.19
Equivalised Net Income	223.93	239.19	254.27	269.34	325.19
Single Earner Married Couple (1 child aged 4 years)
National Insurance	8.60	13.60	18.60	23.60	33.60
Income Tax	10.21	21.31	32.81	44.31	67.31
Child Benefit	13.95	13.95	13.95	13.95	13.95
WFTC	51.80	33.15	14.73	0.00	0.00
Tax and NICs, less child benefit and WFTC, as a percentage of gross earnings	-31.3	-6.1	9.1	18.0	21.7
Net Income	196.93	212.19	227.27	246.04	313.04
Equivalised Net Income	166.89	179.82	192.60	208.51	265.29
Single Earner Married Couple (2 children aged 4 and 6)
National Insurance	8.60	13.60	18.60	23.60	33.60
Income Tax	10.21	21.31	32.81	44.31	67.31
Child Benefit	23.25	23.25	23.25	23.25	23.25
WFTC	66.65	48.00	29.58	11.15	0.00
Tax and NICs, less child benefit and WFTC, as a percentage of gross earnings	-47.4	-18.2	-0.6	11.2	19.4
Net Income	221.08	236.34	251.42	266.49	322.34
Equivalised Net Income	159.05	170.03	180.87	191.72	231.90

The figures in the table are weekly amounts for the 1998–99 tax year. The figures for 1998–99 include the effect of increasing child credits in income related benefits for under 11 s which will be introduced in November 1998.

The data assume that the earner in the household is working over 30 hours a week for Family Credit and Working Families Tax Credit purposes; that earnings are from employment; and that there are no other sources of income. Two versions of each lone parent example are shown: one with new lone parents since April 1998; and one set with those who have been lone parents since 1998, and so will still be receiving lone parent benefit.

The standard McClements scales have been used to determine equivalised income. This is the same process that is used in the DSS's Households Below Average Income publication.

Income tax and NICs, less child benefit and family credit, are shown as a percentage of gross earnings, with negative figures where the family is a net gainer overall from direct taxes and benefits.

Some of these families may also be entitled to housing benefit and council tax benefit. However, as this will depend upon the composition of the housing costs (between mortgage payments, council tax, and rent) housing benefit and council tax benefit have been left out of these figures.