HC Deb 16 January 1984 vol 52 cc14-6W
Mr. Neil Hamilton

asked the Chancellor of the Exchequer what consideration his Department has given to introducing self-assessment for schedule D income tax payers.

Mr. Moore

The Inland Revenue is looking at ways of streamlining the schedule D rules. This would not only be worth doing in itself, but would help to clear the way for a possible move to some form of self-assessment in the longer term. The Revenue is presently carrying out a field test on self-assessment of corporation tax and this exercise should provide a valuable indication of its feasibility and benefits.

Mr. Neil Hamilton

asked the Chancellor of the Exchequer (1) what is the estimated number of taxpayers who have been reclassified by the Inland Revenue as liable to income tax on schedule E as opposed to cases, I, II and VI of schedule D, respectively;

(2) pursuant to his reply to the hon. Member for Tatton, Official Report, 13 July, c. 384, how many taxpayers in each category mentioned were reclassified by the Inland Revenue as being liable to income tax on schedule E.

Mr. Moore

I regret that detailed figures are not available, but it is estimated that in recent years the numbers of taxpayers in the various categories mentioned in that reply are as follows:

  • Full-time Work
  • Certain workers in the film, television and radio industries —7,000.
  • Part-time or Occassional Work
  • Part-time club musicians—300;
  • Certain, mainly casual, journalists—700;
  • Occasional school etc examiners and markers—100,000.

As explained in that reply, the Revenue has concluded, following a review of its tax treatment, that these earnings are properly assessable under schedule E. In many of these cases the earnings in question were not previously declared for tax under any schedule E.

Mr. Rooker

asked the Chancellor of the Exchequer what is his estimate of income tax (a) due and (b) collected from unemployed persons in 1983–84.

Mr. Moore

I shall let the hon. Member have a reply as soon as possible.

Mr. Rooker

asked the Chancellor of the Exchequer (1) what is the income tax liability of unemployed, unmarried, childless couples living together as man and wife and where income in 1983–84 consists solely of supplementary benefit;

(2) what is the current assessing tolerance of income tax below which Inland Revenue does not collect tax due; and when this amount was set;

(3) if he will publish a table showing the number of taxpayers for each year since 1978 and indicating how many were removed or added each year due to changes in the tax threshold.

Mr. Moore

I shall let the hon. Member have a reply as soon as possible.

Mr. Neil Hamilton

asked the Chancellor of the Exchequer whether he will make a statement on the Inland Revenue's attitude to questions of employment status for tax purposes.

Mr. Moore

The Government want to encourage the growth both of employment and self-employment and the qualities of independence and enterprise that are associated with the latter. Consistently with this aim, the Inland Revenue does not seek to tax as employees people who are genuinely in business on their own account. The Revenue's duty is to apply our tax laws fairly on the basis of the facts, to ensure that people are taxed under the correct schedule of charge and to combat evasion of tax whether by employees or by the self-employed. There is certainly no campaign, as has sometimes been suggested, to bring within PAYE those people who are in fact self-employed. In fact it is estimated that between 1979 and 1983 the numbers taxed as self-employed have risen from about 1.9 million to 2.3 million.

Employed Labour Force
Public sector Private sector
Total Thousands Thousands per cent. of total Thousands per cent. of total
1979 25,374 7,417 29.2 17,957 70.8
1980 25,306 7,356 29.1 17,950 70.9
1981 24,323 7,154 29.4 17,169 70.6
1982 23,951 6,992 29.2 16,959 70.8
1983 23,747 6,895 29.0 16,852 71.0
Reduction 1979 to 1983
Number 1,627 522 32.1 1,105 67.9
per cent. fall 6.4 7.0 6.2

In the great majority of cases an individual's employment status for tax purposes is clear-cut but at the margins the terms of a particular engagement or contract may need to be examined. In considering this question and coming to a decision the Inland Revenue, like taxpayers and their representatives, is guided by the criteria independently established by the courts. Anyone who disagrees with an inspector of taxes' decision may have this case heard before the commissioners, who are a local and independent body set up to hear appeals.

Mr. Neil Hamilton

asked the Chancellor of the Exchequer how many representations he has received from individual taxpayers on their employment status for tax purposes.

Mr. Moore

In the year ended 31 December 1983 a total of 67 representations were received from individual taxpayers on the subject of their employment status.