Income Tax (Hansard, 14 April 1988)

19. Mr. John M. Taylor
To ask the Chancellor of the Exchequer what has been the real increase in the yield of income tax from the top 5 per cent. of taxpayers since 1978–79.

§ Mr. Norman Lamont
Compared with 1978–79, the income tax liability of the top 5 per cent. of taxpayers was some £3 billion higher in real terms in 1987–88.

§ 24. Mr. Oppenheim
To ask the Chancellor of the Exchequer how the income tax revenue received from the220W top 5 per cent. of income earners has changed in each year from 1983; and what is his estimate for the coming financial year.

§ Mr. Norman Lamont
The income tax paid by the top 5 per cent. of taxpayers in each year since 1983 is as follows:

£ billion £ billion at 1988–89 prices

1983–84 8.5 10.5

1984–85 9.3 11.0

1985–86 11.2 12.5

1986–87 12.1 13.1

1987–88 13.2 13.7

1988–89 12.5 12.5

§ 34. Mr. Henderson
To ask the Chancellor of the Exchequer what representations he has received from the CBI on the tax reductions for top taxpayers announced in the Budget.

§ Mr. Norman Lamont
The CBI's Budget document called for cuts in the top marginal rates of income tax to improve incentives. Commenting on the Budget the CBI president saidThis is the Budget we have been waiting for. It will help maintain the momentum of Britain's economic recovery. It reflects CBI priorities…in particular it will provide greater incentives for all in British business.

§ 35. Mr. Anthony Coombs
To ask the Chancellor of the Exchequer by how much he expects the income tax revenue from the top 5 per cent. of income earners to rise following the announcement in his Budget; and what proportion he estimates this will be of total income tax revenue.

§ Mr. Norman Lamont
The top 5 per cent. of taxpayers paid £13.2 billion income tax in 1987–88, 30 per cent. of the yield, while in 1988–89 the top 5 per cent. of taxpayers are expected to pay £12.5 billion, 28 per cent. of the yield. The calculation makes no allowance for any changes in taxpayers' behaviour as a result of the changes in the Budget.

§ 36. Mr. Patrick Thompson
To ask the Chancellor of the Exchequer what proportion of total income tax he expects to be paid by the top 5 per cent. of taxpayers in 1988–89; and what was the equivalent figure in 1978–79.

§ 44. Mr. Neil Hamilton
To ask the Chancellor of the Exchequer what proportion of total income tax he expects to be paid by the top 5 per cent. of taxpayers in 1988–89; and what was the equivalent figure in 1978–79.

§ 66. Mr. Tim Smith
To ask the Chancellor of the Exchequer what proportion of total income tax he expects to be paid by the top 5 per cent. of taxpayers in 1988–89; and what was the equivalent figure in 1978–79.

§ Mr. Norman Lamont
It is estimated that in 1988–89 the top 5 per cent. of taxpayers will pay 28 per cent. of total income tax. The corresponding figure for 1978–79 was 24 per cent. The estimate for 1988–89 is provisional.

§ 41. Mr. Squire
To ask the Chancellor of the Exchequer what representations he has received in favour of introducing an initial rate of income tax at a lower level than the proposed standard rate.

§ Mr. Norman Lamont
My right hon. Friend has received very few representations on this subject.
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§ 47. Mr. Bowis
To ask the Chancellor of the Exchequer if he will give the figures for personal income tax rates and tax takes for 1978–79, 1981–82 and 1987–88 and the projected figures for 1988–89 and 1990–91.

Rates of income tax

1978–79¹ Slice of taxable income (£) Rate of tax Per cent. 1981–82¹ Slice of taxable income (£) Rate of tax Per cent. 1987–88 Slice of taxable income (£) Rate of tax Per cent. 1988–89 Slice of taxable income (£) Rate of tax Per cent.

Lower rate 1–750 25 — — — — — —

Basic rate 751–8,000 33 1–11,250 30 1–17,900 27 1–19,300 25

Higher rates 8,001–9,000 40 11,251–13,250 40 17,901–20,400 40 Over 19,300 40

9,001–10,000 45 13,251–16,750 45 20,401–25,400 45

10,001–11,000 50 16,751–22,250 50 25,401–33,300 50

11,001–12,500 55 22,251–27,750 55 33,301–41,200 55

12,501–14,000 60 Over 27,750 60 Over 41,200 60

14,001–16,000 65

16,001–18,500 70

18,501–24,000 75

Over 24,000 83

¹ Investment income surcharge was also payable for these years.

Net income tax receipts

Year £ billion

1978–79 18.7

1981–82 28.7

1987–88 (latest estimate) 41.4

1988–89 (forecast) 42.1

§ 59. Mr. Jack
To ask the Chancellor of the Exchequer what representations he has received on the income tax burden on single pensioners with a gross income of up to £5,000 per annum and married pensioners with a gross income of up to £8,000 per annum; and if he will make a statement.

§ Mr. Norman Lamont
My right hon. Friend has received a small number of representations, including an eloquent one from my hon. Friend.

§ 70. Mr. Hardy
To ask the Chancellor of the Exchequer what is the total value of the reduction in income tax enjoyed by a person with a taxable income of £100,000 per annum(a) in respect of the arrangements made in his Budget Statement for 1988–89 and (b) in total during the period 1980–81 to 1988–89.

§ Mr. Norman Lamont
The reduction in the annual income tax liabilities of a married man with gross annual income of £100,000 would be(a) £13,498 from this year's Budget proposals and (b) £13,585 from all Budget changes from 1980–81 to 1988–89. The figures assume that the taxpayer is entitled to no income tax relief or allowance other than the married man's allowance, and compare income tax liabilities under the proposed tax regime for 1988–89 with those under the 1987–88 and 1980–81 regimes indexed to 1988–89 levels according to the statutory formula.

§ 73. Mr. David Shaw
To ask the Chancellor of the Exchequer what has been the real increase in the yield of income tax from the top 5 per cent. of taxpayers since 1978–79.
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§ Mr. Norman Lamont
Information is given in the tables. Detailed forecasts of tax revenues are not published for years after 1988–89.

§ 88. Mr. Nicholas Bennett
To ask the Chancellor of the Exchequer what has been the real increase in the yield of income tax from the top 5 per cent. of taxpayers since 1978–79.

§ Mr. Norman Lamont
Compared with 1978–79 the income tax liability of the top 5 per cent. of taxpayers was some £3 billion higher in real terms in 1987–88.

	£ billion	£ billion at 1988–89 prices
1983–84	8.5	10.5
1984–85	9.3	11.0
1985–86	11.2	12.5
1986–87	12.1	13.1
1987–88	13.2	13.7
1988–89	12.5	12.5

Rates of income tax
	1978–79¹ Slice of taxable income (£)	Rate of tax Per cent.	1981–82¹ Slice of taxable income (£)	Rate of tax Per cent.	1987–88 Slice of taxable income (£)	Rate of tax Per cent.	1988–89 Slice of taxable income (£)	Rate of tax Per cent.
Lower rate	1–750	25	—	—	—	—	—	—
Basic rate	751–8,000	33	1–11,250	30	1–17,900	27	1–19,300	25
Higher rates	8,001–9,000	40	11,251–13,250	40	17,901–20,400	40	Over 19,300	40
	9,001–10,000	45	13,251–16,750	45	20,401–25,400	45
	10,001–11,000	50	16,751–22,250	50	25,401–33,300	50
	11,001–12,500	55	22,251–27,750	55	33,301–41,200	55
	12,501–14,000	60	Over 27,750	60	Over 41,200	60
	14,001–16,000	65
	16,001–18,500	70
	18,501–24,000	75
	Over 24,000	83
¹ Investment income surcharge was also payable for these years.

Net income tax receipts
Year	£ billion
1978–79	18.7
1981–82	28.7
1987–88 (latest estimate)	41.4
1988–89 (forecast)	42.1