§ Mr. Muddasked the Chancellor of the Exchequer if, to enable Her Majesty's loyal subjects to participate more fully in the Silver Jubilee celebrations, he will forgo the collection of the first £2 on all income tax falling due in the period 3rd to 10th June 1977.
§ Mr. Robert SheldonI am afraid that I cannot accept this suggestion.
§ Mr. Newtonasked the Chancellor of the Exchequer what would be the revenue cost of raising the starting point of higher paid employment from £5,000 to £7,500 for the current financial year; and if he will estimate the number of tax returns that would thereby be saved.
§ Mr. Robert SheldonInformation on which to base a precise figure is not available, but it is estimated that in a full year the cost would be about £11 million, and that about two-thirds of this cost would be incurred in the current year. I regret that the informtaion is not available on which to provide an answer to the remainder of the Question.
§ Mr. Ridleyasked the Chancellor of the Exchequer if he will estimate the level of the income tax threshold as a percentage of average earnings in 1975 and 1976, for a married man with two children under 11 years of age.
§ Mr. Robert SheldonThe figures for the income tax years 1975–76 and 1976–77 are 42–7 per cent. and 42–8 per cent. respectively. The New Earnings Survey estimates of average earnings of full-time adult males in April 1975 and April 1976 have been used, and the family allowance for the second child has been included in the earnings figure. The tax threshold takes account of the family allowance deduction—"clawback".
§ Mr. Newtonasked the Chancellor of the Exchequer if, when he uses the phrase "assuming full implementation of the Budget proposals" in answering Question from honourable Members, he means assuming a basic rate of 33 per cent.
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§ Mr. HealeyI will let the hon. Member have a reply as soon as possible.
§ Mr. Lawsonasked the Chancellor of the Exchequer, pursuant to the Written Answer given to the hon. Member for Blaby on 7th April, Official Report, column 624, how much of the £1,454 million of tax reliefs for those with net incomes of £4,000 or more a year is attributable to the slice of such incomes above £4,000.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 18th May 1977], gave the following information:
£620 million if personal allowances are treated as reducing the top slice of income.
§ Mr. Ralph Howellasked the Chancellor of the Exchequer what loss of revenue would result and what compensatory increase in the standard rate of VAT would be necessary if the bands of taxable income were altered to make tax payable at the following rates: £0–2,000 at 15 per cent., £2,000–4,000 at 20 per cent., £4,000–6,000 at 25 per cent., £6,000–8,000 at 30 per cent., £8,000–10,000 at 35 per cent., £10,000–12,000 at 40 per cent., £12,000–14,000 at 45 per cent., and £14,000 and above at 50 per cent.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 27th May 1977; Vol. 932, c. 649], giving the following information:
Assuming full implementation of all the Budget proposals, the loss of revenue that would result from the proposed changes in income tax is estimated at about £8,500 million at 1977–78 income levels. In order to raise £8,500 million, the standard rate of VAT would need to be increased to 36 per cent, but an increase of this size would cause such substantial changes in the economy, apart from adding considerably to the cost of living, that any estimate of this kind is subject to a greater margin of error than is usual.