§ Mr. LawsTo ask the Chancellor of the Exchequer what his latest estimates are of the proportion of income paid in(a) income tax, (b) income tax and national insurance contributions, (c) income tax, NICs and value added tax and (d) income tax, NICs, vat and council tax for each income decile for each year since 1990–91; and if he will make a statement. [130557]
§ Ruth KellyThe information requested falls within the responsibility of the National Statistician. I have asked him to reply.
Letter from Karen Dunnell to Mr. David Laws, dated 30 September 2003:
The National Statistician has been asked to reply to your recent question on estimates of the proportion of income paid in (a) income tax, (b) income tax and national insurance contributions, (NICs), (c) income tax, NICs and value added tax (VAT) and (d) income tax, NICs, VAT and council tax, for each income decile for each year since 1990–91. I am replying in his absence. (130557)1097WDue to changes in some survey variables, consistent estimates for UK taxes and income are only available with effect from the financial year 1996–97. These are produced from the Office for National Statistics' analysis "The effects of taxes and benefits on household income" and the latest analysis for 2001–02 was published on 11 April 2003 on the National Statistics website.Results for 2001–02 and earlier years are also published in 'Economic Trends', which can be obtained from the House of Commons Library. The analysis includes measures of income inequality for the United Kingdom as a whole based on data from the Expenditure and Food Survey (EPS), formerly the Family Expenditure Survey (FES). For the data that you have requested, sample sizes are only sufficient to allow a breakdown to be given by quintiles of income distribution and not by decile.
Table 1: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 1996–97 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Bottom 3.2 4.6 14.7 17.9 8,031 2nd 5.9 8.5 17.0 19.7 11,344 3rd 10.0 14.2 21.9 24.2 15,519 4th 12.9 17.9 24.9 26.8 21,964 Top 17.4 21.5 27.0 28.4 Average for all households 12.9 17.0 23.8 25.7 1Boundary point between equivalised disposable income quintiles Source:
Office for National Statistics, based on the analysis 'The effects of taxes and benefits on household income', published on the ONS website and in Economic Trends.
Table 2: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 1997–98 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Bottom 2.9 4.4 14.6 17.8 8,504 2nd 5.5 8.2 16.5 19.4 11,922 3rd 9.7 14.2 21.8 24.2 16,342 4th 13.0 18.2 25.3 27.2 23,457 Top 17.4 21.6 27.0 28.4 Average for all households 12.9 17.1 23.8 25.8 1 Boundary point between equivalised disposable income quintiles Source:
Office for National Statistics, based on the analysis 'The effects of taxes and benefits on household income', published on the ONS website and in Economic Trends.
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Table 3: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 1998–99 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Bottom 3.7 5.3 16.0 19.8 8,785 2nd 6.2 9.1 17.3 20.3 12,494 3rd 10.3 14.7 22.4 25.0 17,192 4th 13.2 18.4 25.4 27.4 24,255 Top 18.2 22.3 27.8 29.2 Tables 1 to 6 show for each year between 1996–97 and 2001–02 the requested direct and indirect taxes paid as a proportion of gross income for all households in the UK, and for each income quintile group where households are ranked by equivalised disposable income. Equivalisation is a standard methodology that takes into account the size and composition of households and adjusts their incomes to recognise differing demands on resources. The net council tax figures are gross council tax less reported council tax benefits and discounts. The tables also show the equivalised disposable income quintile point boundaries, which have been calculated separately for each year. For example, the 1st quintile point is the income below which one fifth of all households are estimated to lie. The quintile point boundaries differ between each year as shown in the tables.
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Table 3: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 1998–99 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Average for all households 13.5 17.7 24.5 26.6 1Boundary point between equivalised disposable income quintiles Source:
Office for National Statistics, based on the analysis 'The effects of taxes and benefits on household income', published on the ONS website and in Economic Trends.
Table 4: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile,1999–2000 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Bottom 3.2 4.7 15.9 20.1 9,171 2nd 6.3 9.1 17.3 20.6 13,173 3rd 10.1 14.3 22.1 24.8 18,212 4th 13.3 18.3 25.2 27.4 26,118 Top 17.8 21.7 26.8 28.2 Average for all households 13.4 17.4 24.0 26.2 1Boundary point between equivalised disposable income quintiles Source:
Office for National Statistics, based on the analysis 'The effects of taxes and benefits on household income', published on the ONS website and in Economic Trends.
Table 5: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 2000–01 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Bottom 3.6 5.0 16.4 20.6 9,790 2nd 7.3 9.9 18.5 21.8 13,808 3rd 10.9 15.0 22.8 25.4 19,029 4th 13.9 18.8 25.7 27.9 27,109 Top 17.7 21.5 26.8 28.3 Average for all households 13.7 17.5 24.3 26.5 1 Boundary point between equivalised disposable income quintiles Source:
Office for National Statistics, based on the analysis 'The effects of taxes and benefits on household income', published on the ONS website and in Economic Trends.
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Table 6: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 2001–02 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax Bottom 10,417 3.3 4.5 15.8 20.5 2nd 14,761 6.3 8.7 16.2 19.6 3rd 20,082 10.3 14.3 21.2 24.0
Table 6: Selected direct and indirect taxes paid as a percentage of gross income by equivalised disposable income quintile, 2001–02 United Kingdom % of gross income Quintile Income boundary1 (£ per year) Income tax Income tax and national insurance contributions (NIC) Income tax, NIC and value added tax (VAT) Income tax, NIC, VAT and council tax 4th 13.5 18.3 24.5 26.8 28,631 Top 18.3 22.1 26.7 28.1 Average for all households 13.7 17.5 23.6 25.8 1Boundary point between equivalised disposable income quintiles Source:
Office for National Statistics, based on the analysis 'The effects of taxes and benefits on household income', published on the ONS website and in Economic Trends.