HC Deb 17 October 1989 vol 158 cc45-52W
Mr. Austin Mitchell

To ask the Chancellor of the Exchequer (1) whether he will publish in theOfficial Report a table showing his estimate of the number of cases in which higher rate relief will be given on mortgage interest payments in the current financial year together with (a) the gross amount of interest qualifying for relief, (b) the amount of higher relief and (c) the number of recipients of working age and their distribution by personal tax category and by range of total income together with the average amount of relief given at the standard and higher rate of tax; and if he will add his forecast of the additional cost to the Revenue on the basis of this year's figures and rates of tax of mortgage relief as a result of the separate taxation of married couples;

Beneficiaries1 of higher rate relief on mortgage interest by range of total income: 1989–90
Range of total income (£) Number of tax units (thousand) Gross amount of interest quali-fying for relief (£ million) Cost of excess over basic rate relief (£ million) Average basic rate relief (£) Average excess over basic rate relief (£) Number of non-aged tax units (thousand)
Singles
20,001–25,000 20 75 + 870 60 20
25,001–30,000 65 205 20 770 300 65
30,001–40,000 55 185 25 830 490 55
40,001–50,000 20 80 10 890 530 20
Over 50,000 20 80 10 900 540 20
Total 180 625 65 830 380 180
One-earner couples
20,001–25,000 0 0 0 0 0 0
25,001–30,000 80 250 15 750 200 80
30,001–40,000 115 360 55 770 460 115
40,001–50,000 55 175 25 770 460 55
Over 50,000 75 235 35 780 470 75
Total 325 1,020 130 770 400 325
Two-earner couples
20,001–25,000 0 0 0 0 0 0
25,001–30,000 95 255 15 680 140 90
30,001–40,000 310 940 110 760 350 310
40,001–50,000 110 305 45 710 400 105
Over 50,000 135 430 65 810 480 130
Total 650 1,930 235 750 350 635
All
20,001–25,000 20 75 + 870 60 20
25,001–30,000 240 710 50 730 200 235
30,001–40,000 480 1,485 190 770 390 480
40,001–50,000 185 560 80 750 430 180
Over 50,000 230 745 110 810 480 225
Total 1,155 3,575 430 770 370 1,140
+ - less than £2.5 million
1 includes about 250,000 tax units who are kept out of higher rate tax by this relief

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether he will publish in theOfficial Report tables showing by range of total income up to a lower limit of £100,000, for those above and those below pensionable age and distinguishing between single persons, one-earner and two-earner married couples, the estimated saving to the Exchequer of abolishing all allowances and reliefs

(2) whether he will publish in the Official Report a table showing by range of income and tax status an estimate of the saving to the Exchequer in a full year from abolishing, respectively, the upper earnings limit for national insurance contributions and higher rate relief on mortgage interest.

Mr. Lilley

[pursuant to his replies, 28 July 1989 c. 1122–36]: Provisional estimates of excess over basic rate relief on mortgage interest in 1989–90, based on a projection of the 1986–87 survey of personal incomes, are given in the table. Estimates for independent taxation are not available.

It is estimated that the full year yield, at 1989–90 levels, of the abolition of the upper earnings limit for employees' national insurance contributions would be £1.8 billion. Of the £1.8 billion, it is estimated that £0.3 billion would be from single persons, £0.8 billion from one-earner married couples and £0.7 billion from two-earner married couples. A more detailed breakdown of the yield is not available.

Estimates are consistent with those made at the time of the Budget and they exclude any behavioural effects of the proposed changes.

other than the basic single and married allowances; and if he will provide similar tables on the 1990 basis of separate taxation of husbands and wives.

Mr. Lilley

[pursuant to his reply, 28 July 1989, c. 1121]: The total direct revenue yield from abolishing all income tax allowances (other than the basic single and married allowances) and reliefs cannot be estimated reliably.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what is his estimate of the earned and unearned income of the top 1 per cent. of taxpayers in the current financial year and of the amount they are expected to pay in national insurance contributions.

Mr. Lilley

[pursuant to his reply, 28 July 1989, c. 1127]: I refer the hon. Member to my predecessor's reply to the hon. Member for Dunfermline, East (Mr. Brown) of 3 July, Official Report, columns 33–36 for estimates of the earned and investment income of the top 1 per cent. of income tax payers. They are provisionally estimated to pay about £300 million in national insurance contributions in 1989–90.

Number of tax units liable to tax and amount of earned income by range of total income, 1989–90
Single persons
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit) £ per annum Number of units liable to pay tax ('000s) Amount of earned income (£ million) Number of units liable to pay tax ('000s) Amount of earned income £ million)
2,000 140 360 — —
3,000 780 2,550 120 410
4,000 740 3,000 220 820
5,000 800 4,030 200 860
6,000 900 5,330 170 780
7,000 900 6,250 100 530
8,000 800 6,330 90 500
9,000 580 5,150 50 270
10,000 1,090 11,290 90 630
12,000 1,040 13,200 70 590
15,000 690 11,100 70 630
20,000 340 7,470 50 500
30,000 90 2,810 20 280
50,000 30 1,810 20 430
All ranges 8,920 80,680 1,270 7,230
Number of tax units liable to tax and amount of earned income by range of total income, 1989–90
Married couple without wife's earned income
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit) £ per annum Number of units liable to pay tax ('000s) Amount of earned income (£ million) Number of units liable to pay tax ('000s) Amount of earned income £ million)
2,000 — — — —
3,000 — — — —
4,000 60 280 — —
5,000 150 750 40 190
6,000 240 1,430 90 480
7,000 230 1,550 120 680
8,000 210 1,560 100 650
9,000 270 2,330 80 580
10,000 600 6,070 90 710
12,000 870 10,850 90 880
15,000 860 13,520 80 960
20,000 560 12,400 50 750
30,000 230 8,040 30 650
50,000 100 7,100 20 850
All ranges 4,380 65,880 790 7,380
Number of tax units liable to tax and amount of earned income by range of total income, 1989–90
Married Couple without Wife's Earned Income
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit) £ per annum Number of units liable to pay tax ('000s) Amount of earned income (£ million) Number of units liable to pay tax ('000s) Amount of earned income £ million)
2,000 — — — —
3,000 — — — —
4,000 1 2 — —
5,000 10 30 10 50
6,000 20 120 20 130
7,000 40 270 20 120
8,000 90 670 30 190
9,000 80 720 50 390
10,000 290 2,980 90 860

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether he will publish in theOfficial Report a table showing the number of tax units and amount of earned income in each tax band by range of total income and tax status for those (a) above and (b) below pensionable age.

Mr. Lilley

[pursuant to his reply, 28 July 1989, c. 1127]: Available estimates are given in the tables. They are based on a projection of the 1986–87 survey of personal incomes and are provisional. Earned income includes any state or occupational pensions received.

Married Couple with Wife's Earned Income
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit) £ per annum Number of units liable to pay tax ('000s) Amount of earned income (£ million) Number of units liable to pay tax ('000s) Amount of earned income (£ million)
12,000 730 9,310 90 960
15,000 1,460 23,910 100 1,380
20,000 1,690 38,360 130 2,300
30,000 690 23,820 60 1,390
50,000 180 11,900 20 1,040
All Ranges 5,280 112,090 620 8,810
1 Less than 5,000.
2 Less than £5 million.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether he will publish in theOfficial Report a table showing the number of tax units in each tax band by range of total income and tax status for those below pensionable age, his estimate of the cost to the Revenue of the substitution of a single allowance of £3,000 and a married allowance of £6,000 for the present personal income tax allowances, the married women's earnings allowance and the wife's earnings election together with an increase in the rate of income tax from 25 per cent. to 35 per cent. on total incomes between £5,500 and £13,000 for single persons and £11,000 and £18,500 for married persons.

Mr. Lilley

[pursuant to his reply, 28 July 1989, c. 1127.]:Estimates of the direct change in income tax liability are given in the tables. They assume the following allowance and rate structure:

  1. (i) single person's allowance of £3,000;
  2. (ii) married man's allowance of £6,000;
  3. (iii) abolition of wife's earned income allowance and wife's earnings election;
  4. (iv) a basic rate tax of 25 per cent. on taxable income between
    • £1 and £5,500 for single persons
    • £1 and £11,000 for married couples
  5. (v) a higher rate tax of 35 per cent. on taxable income between
    • £5,501 and £13,000 for single persons
    • £11,001 and £18,500 for married couples
  6. (vi) a higher rate tax of 40 per cent. on taxable income above
    • £13,000 for single persons
    • £18,500 for married couples

No allowance is made for possible behavioural effects or the consequential effects on capital gains tax. All estimates are based on a projection of the 1986–87 survey of personal incomes and are provisional. Further information could be provided only at disproportionate cost.

Number of tax units aged under 65, by range of total income, and cost/yield of changes to income tax allowances and higher rates of tax, 1989–90 Single Persons
Total income (lower limit) £ per annum Number of units liable to pay tax in1989–90('000) Cost(—)/Yield( + ) of proposed regime(£ million)
2,000 140 1
3,000 780 -40
4,000 740 -40
5,000 800 -60
6,000 900 -60
7,000 900 -70
8,000 800 -60
9,000 580 -20
10,000 1,090 80
12,000 1,040 280
15,000 690 360
Total income (lower limit)£ per annum Number of units liable to pay tax in 1989–90('000s) Cost (—) / Yield( + ) of proposed regime (£ million)
20,000 340 420
30,000 90 160
50,000 30 50
All ranges 8,920 1,000
1 Cost of less than £5 million.
Married couples without wife's earned income
Total income (lower limit)£ per annum Number of units liable to pay tax in 1989–90('000s) Cost (—) / Yield( + ) of proposed regime (£ million)
2,000 — —
3,000 — —
4,000 60 -10
5,000 150 -40
6,000 240 -80
7,000 230 -80
8,000 210 -70
9,000 270 -100
10,000 600 -240
12,000 870 -350
15,000 860 -330
20,000 560 -20
30,000 230 100
50,000 100 40
All ranges 4,380 -1,180
Married couples without wife's earned income
Total income (lower limit)£ per annum Number of units liable to pay tax in 1989–90('000s) Cost (—) / Yield( + ) of proposed regime (£ million)
2,000 — —
3,000 — —
4,000 1 2
5,000 10 2
6,000 20 3
7.000 40 10
8,000 90 10
9,000 80 10
10,000 290 30
12,000 730 90
15,000 1,460 300
20,000 1,690 1,180
30,000 690 1,150
50,000 180 430
All ranges 5,280 3,210
1 Less than 5,000.
2 Cost of less than £5 million.
3 Yield of less than £5 million.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer (1) whether he will publish in theOfficial Report a table showing for (a) one-earner and (b) two-earner married couples the number of tax units in each tax band by range of total income and tax status for those (i) above and (ii) below pensionable age and his estimate of the yield to the revenue in the current financial year from abolishing wife's earnings election and raising the higher rate of tax to 40 per cent. on incomes of married couples with total incomes between £18,500 and £27,000, 45 per cent. between £27,000 and £37,000, 50 per cent. between £37,000 and £50,000, 55 per cent. between £50,000 and £250,000 and 60 per cent. above £250,000;

(2) whether he will publish in the Official Report a table showing for single persons the number of tax units in each tax band by the range of total income and tax status for those above and below pensionable age, his estimate of the

Number of tax units, by range of total income, and yield from changes to higher rates of tax, 1989–90 Single persons
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit ) £ per annum Number of units liable to pay tax in1989–90 ('000s) Yield (£ million) Number of units liable to pay tax in 1989–90 ('000s) Yield (£ million)
2,000 7,770 — 1,110 —
15,000 690 40 70 20
20,000 340 220 50 50
30,000 90 170 20 50
50,000 30 270 20 140
All Ranges 8,920 700 1,270 260
Married couples without wife's earned income
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit ) £ per annum Number of units liable to pay tax in1989–90 ('000s Yield (£ million) Number of units liable to pay tax in 1989–90 ('000s) Yield (£ million)
2,000 2,630 — 610 —
15,000 860 — 80 —
20,000 560 30 50 10
30,000 230 120 30 20
50,000 100 240 20 70
All Ranges 4,380 390 790 100
Married couples without wife's earned income
Taxpayers aged under 65 Taxpayers aged 65 and over
Total income (lower limit ) £ per annum Number of units liable to pay tax in1989–90 ('000s) Yield (£ million) Number of units liable to pay tax in 1989–90 ('000s) Yield (£ million)
2,000 1,260 — 310 —
15,000 1,460 — 100 —
20,000 1,690 40 130 10
30,000 690 430 60 40
50,000 180 700 20 100
All Ranges 5,280 1,170 620 150

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether he will publish in theOfficial Report a table showing the number of tax units in each tax band by range of total income and tax status for those (a) above and (b) below pensionable age and his estimate of the yield from making investment income chargeable to national insurance contributions on the same basis as earned income; and if he will include the number of tax units and total investment income in each case.

yield to the Revenue in the current financial year from an increase in higher rate tax for single persons to 40 per cent. on total incomes between £13,000 and £19,000, 45 per cent. between £19,000 and £26,000, 50 per cent. between £26,000 and £34,000, 55 per cent. between £34,000 and £125,000 and 60 per cent. above £125,000.

Mr. Lilley

[pursuant to his replies, 28 July 1989, c. 1127–28]: Estimates of the direct increase in income tax liability are given in the tables. No allowance is made for possible behavioural effects or the consequential effects on capital gains tax. All estimates are based on a projection of the 1986–87 survey of personal incomes and are provisional. Further information could be provided only at disproportionate cost.

Mr. Lilley

[pursuant to his reply, 28 July 1989, c. 1127–28]: The hon. Member's question provides insufficient information on which to base an answer.

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