§ Mr. Ralph Howellasked the Chancellor of the Exchequer what is the new grossed-up standard rate of income tax plus national insurance contribution, not contracted out, if one takes into account that the latter is not tax allowable.
§ Mr. Robert SheldonThe present basic rate of income tax is 34 per cent., and314W the rate of national insurance contribution payable by employees earning up to £120 per week and not contracted out of the new pension scheme is 6½ per cent. Since both alike are charged on the same basis, the combined rate for the two is 40½ per cent. I am not clear what the hon. Member has in mind in his reference to grossing up.
§ Mr. MacGregorasked the Chancellor of the Exchequer how many of the 4 million people who will only pay income tax at the rate of 25 per cent. in the year 1978–79 will be (a) earning wives, (b) young people under 18 years and (c retired people.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 27th April 1978 Vol. 948, c. 674], gave the following information:
The total number of taxpayers, counting earning wives separately, who will pay tax at the 25 per cent. rate as their marginal rate of 1978–79 is estimated at approximately 4,600,000.
Of these, about 1,700,000 are earning wives and 1,000,000 taxpayers aged 65 or over. Figures for young people under age 18 and for retired persons are not available.
§ Mr. MacGregorasked the Chancellor of the Exchequer what is the reduction in weekly tax as a consequence of proposed 1978 Budget changes for a single person with income of £120 per week, together with the corresponding increase in national insurance contributions.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 3rd May, 1978; Vol. 949, c. 185], gave the following information:
The reduction in income tax for a single man is £1.56 per week while the change in national insurance contributions is an increase of £1.76 per week for a person not contracted out of the new pension scheme and a reduction of 80p per week for a person contracted out.