§ Mr. Neil Thorneasked the Chancellor of the Exchequer if he will bring forward proposals for changes in procedure which would improve the treatment of married women for tax purposes.
§ Sir Geoffrey HoweYes. I have two such proposals. The first relates to PAYE codes given to married women. The tax tables give each employee the benefit of the full band of income chargeable at the basic rate. Married couples, like other taxpayers, are entitled to only one basic rate band, unless a wife's earnings election has been made. Consequently a reduction has to be made in the PAYE code number, where husband and wife are both employed and their joint earnings are sufficient to attract liability to higher rate tax. This is to ensure that the right amount of tax is deducted during the year. This reduction, known as the excessive basic rate adjustment, has normally been made in the wife's coding. In future it will be made in the husband's coding, unless the wife's earnings are expected to be greater than her husband's or the couple notify the tax office that they would prefer the reduction to be made in the wife's coding. The Revenue will take this change into account in the code numbers now being prepared to take effect from 6 April 1980.
Secondly, the Revenue is changing its practice on correspondence with married women about tax affairs. Hitherto it has written only in response to letters from married women. Henceforth, tax 180W offices will normally write direct to a married woman about her own tax affairs, whether or not she has first written to the Revenue.
These changes represent an improvement, and I hope a welcome one, in the way married women are treated for tax purposes.