§ Mr. Hodgsonasked the Chancellor of the Exchequer what estimate he has of the tax revenue that would be lost if all overtime and bonus payments were made free of income tax.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 19 February 1979; Vol. 963, c. 35], gave the following information:
As it is not possible from Inland Revenue sources to distinguish the amount of overtime and bonus payments included in total earnings a precise cost cannot be given.
Information derived from the new earnings survey shows that in April 1978 overtime and bonuses, including piece work bonuses, represented about 12 per cent. of earnings on average. If this proportion applied to earnings in 1978–1979 as a whole and if all overtime and bonus payments were liable to tax at the basic rate, the loss of revenue if they were exempted from income tax would be of the order of £3,500 million for 1978–79.