HC Deb 11 January 1988 vol 125 c70W
Mr. Neil Hamilton

To ask the Chancellor of the Exchequer if he will estimate(a) on the basis of 1987–88 income levels, allowances and higher rate thresholds and (b) on the basis of forecast 1988–89 income levels and of 1988–89 allowances and higher rate thresholds, assuming statutory indexation therefore in the 1988 Budget, the full year cost of (i) abolishing the 60 per cent. rate so that the top rate is 55 per cent., (ii) abolishing the 55 and 60 per cent. rates so that the top rate is 50 per cent., (iii) abolishing the 50, 55 and 60 per cent. rates so that the top rate is 45 per cent., (iv) abolishing the 45, 50, 55 and 60 per cent. rates so that the top rate is 40 per cent., and (v) abolishing all the higher rates.

Mr. Norman Lamont

The direct revenue costs in a full year at 1987–88 and 1988–89 income levels of abolishing the higher rates of income tax are given in the table:

£ million
Direct revenue costs
Top rate of tax (per cent.) at 1987–88 levels of income at forecast 1988–89 levels of income
55 190 220
50 450 530
45 850 1,000
40 1,400 1,650
27 3,250 3,800

The costs at 1988–89 levels of income assume indexation of the current income tax bands and allowances to 1988–89 levels as in table 4.1 of the 1987 Autumn Statement. The estimates assume that the wife's earnings election is made where it is beneficial, but no other allowance is made for possible changes in taxpayers' behaviour.

Mr. Gordon Brown

To ask the Chancellor of the Exchequer how many people owed tax interest and penalties as a result of Inland Revenue investigations, for each year since 1979; and what proportion of these paid income tax at(a) basic rate only, (b) above basic rate and (c) above 60 per cent. in each year.

Mr. Norman Lamont

[holding answer 18 December 1987]: I regret that the information is not available in the form requested.

Information is available about the number of Inland Revenue investigations and the yield, but the statistics are not held in a form that would permit the extraction of the number of people in arrears or the distribution of that number as between the different rates of liability.