Mr. G. Whiteasked the Chancellor of the Exchequer the cost to the Exchequer of Income Tax allowances for the years 1937–38 and 1942–43, in respect of earned income allowances, other personal allowances, wives' allowances, children's allowances and adult dependants' allowances.
§ Sir J. AndersonThe personal allowances to which my hon. Friend refers constitute, in effect, exemption limits below which no Income Tax is charged. These exemption limits are, of course, fundamental to the system of Income Tax, and their existence cannot be regarded as a cost to the Exchequer. The question of loss or gain to the Exchequer arises only in respect of changes in these allowances, and the reductions made in recent years have, of course, increased the yield of Income Tax. The allowances in force in 1937–38 and 1942–43 respectively were:
1937–38 1942–43 £ £ Personal allowance (single man) 100 80 Personal allowance (married man) 180 140 Child allowance (each child) 60 50 Housekeeper allowance 50 50 Dependant Relative 25 25 Earned Income allowance 1-fifth 1-tenth If the 1937–38 allowances had obtained in 1942–43, it is estimated that the 1145W produce of the yield of Income Tax for 1942–43 would have been approximately£300,000,000 less.
§ Mr. W. J. Brownasked the Chancellor of the Exchequer why unmarried wives are held eligible for the grant of dependant's allowance when their men serve with the forces, but are not treated as dependants for Income Tax purposes; and if he will remedy this anomaly.
§ Sir J. AndersonI regret that I could not see my way to modifying the conditions governing the Income Tax allowances on the lines suggested by my hon. Friend.