Income Tax

HC Deb 06 December 1977 vol 940 cc699-701W

Mrs. Chalker

asked the Chancellor of the Exchequer what increase in income tax yield he expects to raise from April 1978, when the new increases in State pensions levels are taxed; how many persons will be affected; and what will be the average liability for tax per person for each type of widow's pension.

Mr. Robert Sheldon

On the basis of current incomes, allowances and tax rates it is estimated that the inclusion in income subject to tax of the new increase in State pension for a full year would result in additional revenue of about £100 million.

The numbers affected would be about 2,400,000, counting married couples as one.

For widows liable to tax at the basic rate the extra tax payable would be £0.75 per week for those receiving a standard widow's pension or a widowed mother's allowance—excluding tax due on dependency allowances for children—and £0.49 per week for war widows in receipt of a standard pension.

Mr. Wakeham

asked the Chancellor of the Exchequer, in the light of the fact that many 1977–78 income tax assessments were agreed by taxpayers, particularly small businesses, before the announcement of 26th October and in many cases have become incorrect, what steps are being taken to allow late appeal in such cases and to allow taxpayers if necessary to revise their claims for capital allowances; and what instructions he has given to the Inland Revenue to keep the paperwork to a minimum.

Mr. Robert Sheldon,

pursuant to his reply [Official Report, 2nd December 1977; Vol. 940, c. 460], gave the following information:

An Inland Revenue Press statement of 26th October explained that 1977–78 assessments under Schedule A or D would be reviewed by tax offices to give effect to the increased personal allowances, etc., announced on 26th October, and that, where necessary, amended notices of assessment would be issued after the relevant resolutions had been approved by Parliament. All assessments already made will be reviewed, and no action, by way of late appeal or otherwise, is necessary by the taxpayer or his agent.

As a result of the changes in personal allowances, etc., some taxpayers may now wish to revise their claims to capital allowances. Tax offices will accept revised claims for capital allowances for 1977–78 which arise directly from the changes announced on 26th October.

It is invariably the objective of the Inland Revenue to keep paperwork to a minimum.