§ Dr. McDonaldasked the Chancellor of the Exchequer if he will update the answer of 1 February 1982, Official Report, c. 19–22, and give the latest comparisons of the current income tax rates of the member states of the European Economic Community, showing at what levels of income, tax becomes payable and at what rate, giving £ sterling equivalents, and showing separately the effects of income tax alone and the combined effect of income tax and social security contributions by the wage earner.
§ Mr. Ridley[pursuant to his reply, 14 February 1983, Vol. 36, c. 8]: The information requested is given in the table:
income tax. Because of the various reliefs mentioned in note 4, these rates differ in many of the countries from the nominal starting rates on the statutory income tax scales.
The threshold figures for the married couple and the married couple with two children in Ireland are an exemption limit. Immediately above that limit income tax may not exceed 60 per cent. of the difference between total income and the exemption limit, if that is less than tax calculated on the normal basis. Since the ordinary personal allowances and other standard reliefs total substantially less than the exemption limit the effective starting rate for an income just above the exemption limit is 60 per cent. (67.5 per cent. including social security contributions). The nominal starting rate of tax is 25 per cent. (32.5 per cent. including social security contributions).
6. The combined rate of income tax and social security contributions is the actual income tax rate plus the rate of compulsory social security contributions payable by employees with income at the income tax threshold level, adjusted (where appropriate) for income tax relief for the contributions.
27W7. In considering the tax thresholds for married couples with two dependent children, regard should also be had to social security benefits payable for children since in some countries child tax allowances (which are reflected in the table) are supplemented by child benefits (which are excluded); and in other countries, including the United Kingdom, there are child benefits but no child tax allowances. To complete the picture, the annual amount of child benefit for two children (at basic rates) in these countries was as follows in 1982 (1982–83 in Ireland and United Kingdom):
£ Belgium 730 Denmark 315 France 435 Germany 465 Greece 195 Ireland 235 Italy 214 Luxembourg 560 Netherlands 700 United Kingdom 570 8. The figures in brackets include local income taxes at typical rates.