§ Mr. Tomlinsonasked the Chancellor of the Exchequer whether he has any proposals to change the amount of the clawback adjustment—the family allowance deduction—for 1975–76.
§ Mr. Robert SheldonI have decided to leave the amount of the family allowance deduction unchanged this year notwithstanding the increase in the basic rate of tax. This will mean that, for the basic rate taxpayer, the tax collected by the operation of the deduction will in theory exceed—by about 2½p a week for each qualifying child—the amount of the 1968 FAM increase after payment of basic rate tax on it. In practice, how-118W ever, this effect will often be offset by thee approximations in the taxpayer's favour in the PAYE codes and tax tables. Moreover, to revise the family allowance deduction would require a review of the PAYE codings of all families in receipt of family allowance, involving some hundreds of thousands of extra hours of work in tax offices.