Tax Changes (Gains) (Hansard, 28 April 1986)

§ Mr. Meacher
asked the Chancellor of the Exchequer if he will specify the distribution of gains in the Budget from each item where tax changes were made other than normal indexation, according to income bands as follows: less than £5,000 per year, £5,000 to £7,500, £7,500 to £10,000, £10,000 to £12,500, £12,500 to £15,000, £15,000 to £20,000, £20,000 to £30,000, £30,000 to £50,000 and above £50,000; and if he will indicate the percentage of total tax changes accruing to each group and the percentage of the total numbers of taxpayers that each group comprises.

§ Mr. Moore
[pursuant to his reply, 9 April 1986, c. 124]: Information in the form requested is available only for income tax changes and is as follows:

^*Range of gross income †Tax units as percentage of total liable to tax Reduction in income tax liability in 1986–87 from Budget proposals compared with indexation

(£ per year) Per cent. Amount (£ million) As percentage of Total Per cent.

Under 5,000 18 40 4

5,000 to 7,500 21 120 10

7,500 to 10,000 17 150 13

10,000 to 12,500 14 180 16

12,500 to 15,000 10 150 13

15,000 to 20,000 11 230 20

20,000 to 30,000 6 200 17

30,000 to 50,000 2 70 6

Above 50,000 1 8 1

ALL 100 1,150 100

^* Income for income tax purposes.

† i.e. counting married couples as one and combining their income.

327W

§ Mr. Meacher
asked the Chancellor of the Exchequer what is the gain to taxpayers at less than half, half to three-quarters, three-quarters to one, one to one and a half, one and a half to two, two to three, three to five and five to 10, and more than 10 times average earnings from the 1p cut in income tax; if he will specify these bands in £ sterling per year at current earnings; how many taxpayers are in each of these bands; and what percentage of the total number of taxpayers each group comprises.

§ Mr. Moore
[pursuant to his reply, 9 April 1986, c. 124]: Information on the effect of the Budget proposals compared with statutory indexation on tax liabilities for 1986–87 is shown in the following table. This includes the

Gross income range^* Number of tax units† Reduction‡ Average per tax unit

Multiples of average earnings in 1986–87 £ per year at 1986–87 prices Millions As percentage of total Total (£ million) £

under ½ under 5,559 4.7 23 60 15

½—¾ 5,559–8338 4.7 23 160 35

¾–1 8,338–11,118 3.5 17 180 50

1–1½ 11,118–16,676 4.5 22 340 75

1½–2 16,676–22,235 1.7 8 200 120

2–3 22,235–33,353 1.0 5 160 160

3–5 33,353–55,588 0.3 1.5 45 150

above 5 above 55,5880 0.1 0.5 6 60

All All 20.5 100 1,150 60

^* Gross income for income tax purposes.

† Counting married couples as one and combining their incomes.

‡ Reduction in income tax liability under Budget proposals compared with indexation.

^*Range of gross income	†Tax units as percentage of total liable to tax	Reduction in income tax liability in 1986–87 from Budget proposals compared with indexation
(£ per year)	Per cent.	Amount (£ million)	As percentage of Total Per cent.
Under 5,000	18	40	4
5,000 to 7,500	21	120	10
7,500 to 10,000	17	150	13
10,000 to 12,500	14	180	16
12,500 to 15,000	10	150	13
15,000 to 20,000	11	230	20
20,000 to 30,000	6	200	17
30,000 to 50,000	2	70	6
Above 50,000	1	8	1
ALL	100	1,150	100
^* Income for income tax purposes.
† i.e. counting married couples as one and combining their income.

Gross income range^*	Number of tax units†	Reduction‡	Average per tax unit
Multiples of average earnings in 1986–87	£ per year at 1986–87 prices	Millions	As percentage of total	Total (£ million)	£
under ½	under 5,559	4.7	23	60	15
½—¾	5,559–8338	4.7	23	160	35
¾–1	8,338–11,118	3.5	17	180	50
1–1½	11,118–16,676	4.5	22	340	75
1½–2	16,676–22,235	1.7	8	200	120
2–3	22,235–33,353	1.0	5	160	160
3–5	33,353–55,588	0.3	1.5	45	150
above 5	above 55,5880	0.1	0.5	6	60
All	All	20.5	100	1,150	60
^* Gross income for income tax purposes.
† Counting married couples as one and combining their incomes.
‡ Reduction in income tax liability under Budget proposals compared with indexation.