§ Mr. David Howellasked the Chancellor of the Exchequer whether he will make a statement explaining the differences in the procedures between those required to establish entitlement to child tax allowances and those which will be required to establish entitlement to the child benefits which replace them.
§ Mr. Robert SheldonIn both cases, entitlement is established on the basis of information given to the appropriate tax or social security office, and the decision is subject to appeal. A claim to child tax allowance is normally made by the father. A claim to child benefit will normally be made by the mother and, as with family allowances at present, will need to be supported by a birth certificate. The information required, which differs in detail and may also depend on the age or family circumstances of the child is straightforward and is set out on the appropriate claim forms.
§ Dr. McDonaldasked the Chancellor of the Exchequer what would be the costs, in terms of loss of revenue to the Exchequer, if the tax thresholds due to take effect from April 1977 were raised to the current FIS levels for: (a) a married couple with one child aged 4 years, (b) a married couple with two children aged 4 and 8 years, (c) a married couple with three children aged 4, 8 and 11 years, (d) a married couple with four children aged 4, 8, 11 and 16 years, and (e) a married couple with six children aged 4, 6, 8, 11, 14 and 16 years
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 24th January 1977; 130W Vol. 924, c. 411], circulated the following answer:
The costs of increasing tax thresholds to the FIS prescribed amounts for the family types referred to are estimated as follows:
£ million Married couple with: 1 child … … … 600 2 children … … … 630 3 children … … … 290 4 children … … … 110 6 children … … … 15 These estimates are based on 1976–77 income levels but assume the child tax allowances for 1977–78 after the introduction of the Child Benefit Scheme. The FIS prescribed levels depend on the number of children in the family but not on the ages of the children. It is assumed9 that for each family type an allowance equivalent to the FIS prescribed amount is given regardless of the ages of the children in the family.
§ Dr. McDonaldasked the Chancellor of the Exchequer what would be the costs, in terms of loss of revenue to the Exchequer, if a band of taxation at 20 per cent. were introduced between the tax thresholds due to take effect in April 1977 and the current FIS levels for: (a) a married couple with one child aged 4 years, (b) a married couple with two children aged 4 and 8 years, (c) a married couple with three children aged 4, 8 and 11 years, (d) a married couple with four children aged 4, 8, 11 and 16 years, and (e) a married couple with six children aged 4, 6, 8, 11, 14 and 16 years; and what would be the savings on income tax for the married couples as described.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 24th January 1977; Vol. 924, c. 411], circulated the following information:
Based on 1976–77 income levels, the estimated costs of introducing a reduced rate band at 20 per cent. between the 1976–77 tax thresholds adjusted for the introduction of the Child Benefit Scheme and the present FIS prescribed amounts are as follows:—
131W It has been assumed that the reduced rate band applies to all married couples with the number of children shown regardless of the age of the children. The maximum reductions in annual income tax payable would be:
£ million Married Couples: 1 child … … … 240 2 children … … … 250 3 children … … … 170 4 children … … … 50 6 children … … … 5
£ Married: 1 child age 4 112.05 2 children ages 4 & 8 121.65 3 children ages 4, 8 & 11 126.00 4 children ages 4, 8, 11 & 16 125.85 6 children ages 4, 6, 8, 11, 14 & 16 139.80