§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer (1) if he will give the number of people who have no income declared for tax purposes other than unearned income by their highest marginal rate of tax in 1987–88;
(2) if he will give for 1987–88 the number of people paying tax at (i) 60 per cent., (ii) 55 per cent., (iii) 50 per cent., (iv) 45 per cent. and (v) 40 per cent. who derive (a) 100 per cent., (b) 90 to 100 per cent., (c) 75 to 100 per cent. and (d) 50 to 100 per cent. of their income from unearned income.
§ Mr. Norman Lamont[holding answers 18 April 1988]: Estimates of tax-paying tax units who derive more than half their income from investment are given in the table. All estimates are subject to considerable uncertainty because they are based on a projection of the 1985–86 survey of personal incomes. Also, the data from the survey on investment income have been adjusted to allow for investment income not reported to tax offices, for example where basic rate liability is satisfied by deduction of tax at source. Estimates for basic rate taxpayers are therefore particularly tentative.
574W
Number of tax units1 with investment income2 by marginal rate of tax, 1987–883 Percentage of total income derived from investment income Marginal rate per cent. 100 per cent, thousands 90–100 per cent, thousands 75–100 per cent. thousands 50–100 per cent, thousands 27 60 80 170 500 40 1 5 11 23 45 6 14 32 50 2 6 9 21 55 3 7 18 60 1 9 21 30 1 Married couples and single persons. 2 Excluding pensions. 3 Treating all investment income as though it were received gross and subject to the individual's appropriate marginal rate.
§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer (1) if he will give figures at 1988–89 prices in the form of tables 1 and 2 of the Inland Revenue press release dated 15 March on independent taxation of husbands and wives classified by joint income of husbands and wives, giving figures for joint incomes of(a) up to £5,000, (b) £5,000 to £10,000, (c) £10,000 to £15,000, (d) £15,000 to £20,000, (e) £20,000 to £25,000, (f) £25,000 to £30,000, (g) £30,000 to £50,000, (h) £50,000 to £75,000, (i) £75,000 to £100,000 and (j) over £100,000, giving the total reduction in tax for each range of joint income;
(2) if he will give figures for the total reduction in tax separately for husband and wife at 1988–89 prices in the form of tables 1 and 2 of the Inland Revenue press release dated 15 March on independent taxation of husband and wife, classified by joint incomes of husbands and wives, giving figures for joint incomes of (a) up to £5,000, (b) £5,000 to £10,000, (c) £10,000 to £15,000, (d) £15,000 to £20,000, (e) £20,000 to £25,000, (f) £25,000 to £30,000, (g) £30,000 to £50,000, (h) £50,000 to £75,000, (i) £75,000 to £100,000 and (j) over £100,000;
(3) if he will give figures for the total reduction in tax separately for husband and wife for 1988–89 on the assumption that the independent taxation provisions were operative for 1988–89, in the form of tables 1 and 2 of the Inland Revenue press release dated 15 March on independent taxation of husband and wife, classified by joint incomes of husbands and wives, giving figures for joint incomes of (a) up to £5,000, (b) £5,000 to £10,000, (c) £10,000 to £15,000, (d) £15,000 to £20,000, (e) £20,000 to £25,000, (f) £25,000 to £30,000, (g) £30,000 to £50,000, (h) £50,000 to £75,000, (i) £75,000 to £100,000 and (j) over £100,000, stating the number of husbands and wives falling within each income group.
§ Mr. Norman Lamont[holding answers 29 April and 9 May 1988]: Available estimates are given in the tables. The reductions in income tax liability relate to a full year at 1990–91 projected levels of income. The 1988 Budget proposals for income tax rates and allowances have been indexed to 1990–91 according to the statutory formula. They are on a consistent basis with the estimates of the direct revenue costs of independent taxation given in the 1988 Financial Statement and Budget Report and the estimates in section 5 of the press release on independent taxation. I regret that reliable estimates for detailed ranges of income above £50,000 per year are not available, as estimates are based on a projection of the 1985–86 survey 575W of personal incomes. All estimates are provisional and subject to considerable uncertainty. Estimates at 1988–89 levels of income are not available.
Table 1 Married couples with reductions in tax liability by total income of husband and wife Non aged Aged All Total income of husband and wife Number Total reduction Number Total reduction Number Total reduction £00 000 £ million 000 £ million 000 £ million 0–5 — — — — — — 5–10 50 10 400 90 450 100 10–15 80 190 60 270 60 15–20 40 — 130 50 170 50 20–25 30 10 60 10 90 20 25–30 50 10 40 20 90 30 30–50 600 210 60 50 660 260 50 + 160 100 30 50 190 150 All 1,010 340 910 330 1,920 670
Table 2 Husbands with reductions in tax liability by total income of husband and wife Total income of husband and wife £'000 Non aged Aged All Number Total reduction Number Total reductions Number Total reductions £000 000 £ million 000 £ million 000 £ million 0–5 — — — — — — 5–10 — — — — — — 10–15 — — 60 10 60 10 15–20 — — 50 10 50 10 20–25 — — — — — — 25–30 — — — — — — 30–50 260 120 10 10 270 120 50 + 90 50 10 100 60 All 350 170 130 30 480 200
Table 3 Wives with reductions in tax liability by total income of husband and wife Non aged Aged All Total income of husband and wife Number Total reductions Number Total reductions Number Total Reductions £000 '000 £ million '000 £ million '000 £ million 0–5 — — — — — — 5–10 50 10 400 90 450 100 10–15 90 180 50 270 50 15–20 40 10 130 40 170 40 20–25 30 50 10 80 20 25–30 50 10 40 20 90 30 30–50 370 90 50 50 420 140 50 + 90 50 30 40 120 90 All 720 170 880 300 1,600 470 Notes:
- 1. Table 2 assumes that before Independent Taxation the wife's income is the top slice of the husband's income.
- 2. Estimates are given to the nearest 10,000 taxpayers or £10 million tax. Some groups in the tables have been aggregated to provide estimates and a dash is used to denote fewer than 5,000 taxpayers or less than £5 million tax.
- 3. Aged taxpayers are where either the husband or the wife is aged 65 or over.
§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer if he will give for 1987–88 and 1988–89 by the highest marginal rate of income tax for 1987–88 (i) the number of tax units in receipt of unearned income and (ii) to total tax levied on unearned income under the tax rates operating in 1987–88 and 1988–89.
576W
§ Mr. Norman Lamont[holding answer 18 April 1988]Estimates of the numbers of tax-paying tax units in receipt of investment income are in the table. All estimates are uncertain because they are based on a projection of the 1985–86 survey of personal incomes. Also, the data on investment income from the Survey have been adjusted to allow for investment income not reported to tax offices, for example where basic rate liability is satisfied by 577W deduction of tax at source. Figures for the number of basic rate taxpayers with investment income in the table therefore provide only a guide to the order of magnitude.
The tax liability on investment income for 1987–88 and 1988–89 is estimated at £6.2 billion and £6.3 billion respectively. The 1988–89 estimate assumes that the 1988 Budget proposals for income tax rates and allowances are implemented. In the calculation, investment income has been treated as the top slice of income and all investment income taxed as though it were received gross and subject to the individual's appropriate marginal rate of tax.
Tax units1 in receipt of investment income2 by marginal rate of income tax Marginal rate of income tax Per cent. Number of tax units1 in 1987–88 Number of tax units1 in 1988–893 ('000) ('000) 27 9,500 10,000 40 280 320 45 265 290 50 175 215 55 85 95 60 130 155 Total 10,500 11,000 1 Married couples and single persons. 2 Excluding pensions. 3 Assuming the 1987–88 tax regime has been indexed to 1988–89.