§ Sir Brandon Rhys Williamsasked the Chancellor of the Exchequer, further to his answer of 13 June, Official Report, column 332, when the hon. Member for Kensington can expect to receive replies to the two questions tabled for answer that day.
§ Mr. Norman LamontI regret the delay in answering these questions; they are being answered today.
§ Sir Brandon Rhys Williamsasked the Chancellor of the Exchequer what would be the changes in the yield of income tax, higher rate tax and employee's contributions 509W to national insurance in 1986–87 if the combined rates were consolidated at 40 per cent. of taxable incomes with the tax allowances remaining as at present.
§ Mr. Norman Lamont[pursuant to his reply, 13 June 1986, c. 332]: The yields from employees in 1986–87 would be as follows:
£ billion Existing regime basic rate income tax 30.5 higher rate income tax 1.5 employees' NIC 11.6 total 43.6 Combined 40 per cent, rate for income lax and NIC 42.0 Decrease in yield 1.6 The effects of applying a 40 per cent. combined rate to other taxpayers, including the self-employed and the elderly, are not included in the figures above.
§ Sir Brandon Rhys Williamsasked the Chancellor of Exchequer if he will publish a table showing his estimate for the current financial year of the numbers of people who will be liable to pay income tax, higher rate tax and employee's contributions to national insurance, divided into the main categories on the basis of the combined rates of deduction from income for which they will be liable.
§ Mr. Norman Lamont[pursuant to his reply, 13 June 1986, c. 332]: The table gives estimates of employees liable to income tax and national insurance contributions (NIC) in 1986–87 by the combined marginal rate of tax and NIC. Estimates are derived from projections of the 1983–84 "Survey of Personal Incomes" which does not contain details of NIC. These have been imputed from earnings levels on the simplifying assumption that all employees are contracted into the earnings related part of the National Insurance scheme and do not pay the reduced rate for married women optants. Other estimates could only be produced at disproportionate cost.
Employees liable to income lax and NIC by marginal rate Income Combined Tax and NIC Marginal rate Number of employees Taxable Income* Earnings of individual Per cent. '000s £ pa £ pw 5 500 0 38.50–60 7 100 0 60–90 9 200 0 90–285 29 500 1–17,200 Under 38.50 34 1,300 1–17,200 38.50–60 36 2,400 1–17,200 60–90 38 12,400 1–17,200 90–285 29‡ 1,000 1–17,200 above 285 40‡ 400 17,201–20,200 all ranges 45‡ 300 20,201–25,400 all ranges 50‡ 100 25,401–33,300 all ranges 55‡ 100 33,301–41,200 all ranges 60‡ 100 above 41,200 all ranges All 19,400 * For married couples taxable income is the combined income of the husband and wife except where there is a wife's earnings election, when the wife's earnings are treated separately as her taxable income. † Above the upper earnings limit (£285 per week) for National Insurance contributions, the marginal rate of NIC is zero. ‡ For higher rate taxpayers the marginal rate of NIC is zero, except for a few cases where the wife's earnings are below the upper earnings limit or much of the income comes from investments.