§ Mr. Roderickasked the Chancellor of the Exchequer what are his estimates of the cost of dropping the 50 per cent. rule under marginal relief and substituting a 40 per cent., 30 per cent., and 20 per cent. rule, respectively.
§ Mr. NottThe cost of a 40 per cent. margin would be about £10 million. A margin at or below the basic rate of tax—30 per cent.—would not be practicable.
§ Mr. Roderickasked the Chancellor of the Exchequer what is his estimate of the number of single and married pensioners, respectively, who would benefit if the 50 per cent. rule for marginal relief were replaced by a 40 per cent., 30 per cent., or 20 per cent. rule, respectively; and what is his estimate of the average benefit in each case.
§ Mr. NottThe numbers of single persons and married couples who would benefit from a reduction in the margin to 40 per cent. are about 420,000 and 425.000 respectively. The average benefits would be about £7 and about £16 respectively. A margin at or below the basic rate of tax—30 per cent.—would not be practicable.
§ Mr. Roderickasked the Chancellor of the Exchequer at what income levels for single and married pensioners, respectively, marginal relief ceases to be of benefit; and at what levels it would cease to be of benefit if the 50 per cent. rule 257W was replaced by 40 per cent., 30 per cent., and 20 per cent. rule, respectively.
§ Mr. NottThe figures are as follows:
Benefit ceases at Margin Single Married £ £ Present 50 per cent. 857.50 1,337.50 40 per cent. 1,015.00 1,675.00 A margin at or below the basic rate of tax—30 per cent.—would not be practicable.
§ Mr. Roderickasked the Chancellor of the Exchequer on what basis he maintains a margin of £323 per annum between the basic State pension for 1973–74 and the tax threshold for single pensioners; and whether the margin is calculated by reference to any tax allowances on average earnings.
§ Mr. NottThe purpose of age exemption is to give elderly people a rather higher tax starting point than younger taxpayers and the proposed income limit of £700 for elderly single people gives them a reasonable margin of advantage.