§ Mr. TrotterTo ask the Chancellor of the Exchequer (1) how many employees' earnings, including the value of benefits, exceed the rate of(a) £8,500 and (b) £17,000 per year;
(2) how many employees earning more than (a) £8,500 and (b) £17,000 a year, in each case including the value of benefits, are assessed on benefits;
64W(3) how much tax is raised in a year from assessing for benefits those earning as employees more than £8,500 a year, including the value of benefits; and what is his estimate of how much tax would be forgone if the figure of £17,000 was to be substituted for that of £8,500.
§ Mr. Norman Lamont[holding answers 9 March 1989]: Provisional estimates of the number of employees in each of the categories specified are given in the table. Figures exclude directors because benefits received by directors are taxable irrespective of the level of their earnings.
Number of employees (million) Annual rate of earnings £8,500 £17,000 Number of employees whose earnings in 1988–89 (including any benefits received but after deductions of contributions to approved pension funds) exceed each rate 9.8 1.9 Of which: liable to tax on benefits received 1.5 0.7 The direct revenue yield, in 1988–89 terms, arising from the taxation of expenses and benefits received by employees (excluding directors) with earnings above the £8,500 threshold is estimated to be about £510 million. A further £370 million arises from the taxation of benefits received by directors. The direct revenue cost of an increase in the earnings threshold used to determine whether an employee is liable to tax on benefits is estimated to be about £150 million in 1988–89 terms.