§ Mr. Mike Thomasasked the Chancellor of the Exchequer how much it would be necessary to increase tax thresholds for single persons, childless married couples and married couples with one, two, three, four and five children, respectively, to preserve real values since April 1974; how many individuals would be taken out of the tax bracket if the thresholds were raised to these levels; and what would be the respective figures to restore 1966 real value.
§ Mr. Robert SheldonOn the basis of the increase in the retail price index—all items—between April 1974 and January 1975, the latest available figure, the tax thresholds for single persons and childless married couples would need to be increased from their present levels of £625 and £865 to £707 and £978 respectively. For married couples with children the threshold depends upon the ages of the children. To preserve the real value of child tax allowances over the same period would require increases as follows:
Age of child Present allowance £ 1974 allowance uprated by RP1 £ Over 16 305 345 Over 11 but under 16 275 311 Under 11 240 272 If these increased thresholds and allowances had applied for the tax year 440W 1974–75, about 1.3 million individuals would have been taken out of liability to tax.
In 1966 the tax thresholds depended on whether the income of the taxpayer was derived from earnings or investments. For taxpayers with wholly earned income, the thresholds and allowances with the same real values in January 1975 as in 1966 would be as follows:
£ Single person 549 Married couple 849 Child allowance: Over 16 412 Over 11 but under 16 349 Under 11 287 Changes in real value since 1966 have been measured by the increase in the consumer price index between 1966 and 1973 and in the retail price index between 1973 and January 1975. No allowance has been made for the abolition since 1966 of the bands of income charged at reduced rates of tax.