§ Mr. BarronTo ask the Chancellor of the Exchequer if he will estimate the number of married couples who will stand to gain in 1990–91 from transferring the married couple's allowance to the wife.
§ Mr. Norman LamontAbout 600,000 married couples are expected to benefit from transferring the married couple's allowance to the wife in 1990–91.
§ Mr. ClayTo ask the Chancellor of the Exchequer by how much the value of income tax personal allowances has increased in real terms since 1979; how this amount has been distributed to each band of income taxpayers, both in total and in amount per taxpayer.
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§ Mr. Norman Lamont[holding answer 30 March 1988]: With the increases announced in the 1988 Budget, the single and married man's personal allowances will have increased by 26.5 per cent. and 27.6 per cent; respectively, in real terms since 1978–79. The table shows the cost of
Cost of real increases in personal allowances 1978–79 to 1988–89 at 1988–89 income levels and tax rates Total income Total cost Gain per taxpayer Single Married couple All Single Married couple All £ £ million £ million £ million £ £ £ Under 5,000 390 50 440 120 130 120 5,000 to 10,000 650 580 1,240 140 220 170 10,000 to 15,000 260 910 1,170 150 270 230 15,000 to 20,000 70 720 780 140 300 270 20,000 to 30,000 50 660 710 190 330 310 30.000 to 50,000 20 270 290 250 380 370 Over 50,000 10 80 80 260 390 370 All 1,450 3,260 4,710 140 280 220
§ Mr. ClayTo ask the Chancellor of the Exchequer if he will publish a table showing the reductions in income tax liabilities, at 1988–89 income levels, of the proposed 1988–89 allowances, thresholds and rates, and comparable figures for the 1978–79 regime indexed to 1988–89 showing(a) the number of tax units, (b) the total amount of reductions and (c) the average reduction per tax unit for the top 1 per cent., 5 per cent., 10 per cent. and 20 per cent. of taxpayers and the bottom 1 per cent., 5 per cent., 10 per cent. and 50 per cent. of taxpayers.
§ Mr. Norman Lamont[holding answer 30 March 1988]: The information is given in the table. I regret that information for the bottom 1 per cent. and the bottom 5 per cent. of taxpayers is not available. Child tax allowances, which were being phased out in 1978–79, have been excluded from the comparison. The estimates are based on a projection of the 1985–86 survey of personal incomes and are therefore provisional.
Reductions in Income Tax Liabilities in 1988–89 compared with the 1978–79 Indexed Tax Reigime Point of income distribution 1 in 1988–89 Percentage Number of units2 paying tax in 1988–89 '000s Total reduction in tax compared with the 1978–79 indexed regime £ million Average3 reduction in tax compared with the 1978–79 indexed regime £ per year Top 1 210 4,740 22,680 Top 5 1,050 7,520 7,200
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Income Tax and Income Tax + NIC as Percentages of Gross Earnings Multiples of average earnings 2/3 1 2 5 10 Single 1956–57 Tax 10.4 16.6 24.8 40.5 55.2 Tax + NIC 14.0 18.9 26.0 41.0 55.4 1978–79 Tax 21.0 25.0 29.5 50.5 66.6 Tax + NIC 27.5 31.5 33.7 52.2 67.5 1988–891 Tax 17.3 19.9 24.5 33.8 36.9 Tax + NIC 26.3 28.9 30.1 36.1 38.0 Married these increases, including those for age allowances and the average reductions in income tax liability for single people and married couples at different levels of income. A11 estimates are provisional.
Point of income distribution 1 in 1988–89 Percentage Number of units2 paying tax in 1988–89 '000s Total reduction in tax compared with the 1978–79 indexed regime £ million Average3 reduction in tax compared with the 1978–79 indexed regime £ per year Top 10 2,090 9,410 4,500 Top20 4,180 11,950 2,860 Bottom 10 2,090 380 120 Bottom 20 4,180 810 150 Bottom 50 10,450 3,310 290 All taxpayers 20,900 20,000 910 1 Based on numbers of tax units expected to pay tax in 1988–89. 2 Married couples count as one unit. 2 Based on numbers of tax units liable to pay tax under the indexed 1978–79 regime.