Tax Changes (Hansard, 3 April 1990)

§ Mr. Meacher
To ask the Chancellor of the Exchequer if he will update, to take account of the 1990 Budget, the information on tax changes contained in his reply to the hon. Member for Oldham, West of 4 April 1989,Official Report, columns 7-8.

§ Mr. Kirkwood
To ask the Chancellor of the Exchequer if he will update, to take account of the 1990 Budget, the information on tax changes contained in his reply to the hon. Member for Oldham, West (Mr. Meacher) on 21 October 1986,Official Report, columns 812-14.

§ Mr. Lilley
[holding answers 28 and 29 March 1990]: The information is in the tables. For each financial year shown, the tables compare the yield from the tax regime in that year, with the 1978–79 tax regime, both assuming independent taxation. All estimates are based on a 525W provisional 1990–91 income base projected from the 1987–88 survey of personal incomes and all tax regimes have been indexed to 1990–91 levels (using the new independent taxation allowances) by reference to the statutory formula. The comparisons therefore reflect budgetary changes in income tax rates and allowances, but not (i) any changes since 1978–79 in the definition of the

Average gain per individual² (£ per annum)

Range of individual's income in 1990–91 (£) 1979–80 1984–85 1985–86 1986–87 1987–88 1988–89 1989–90 1990–91

Under 5,000 50 20 50 60 80 110 110 110

5,000 to 10,000 140 70 120 150 220 320 320 320

10,000 to 15,000 290 230 280 360 500 690 690 690

15,000 to 20,000 420 380 430 550 760 1,030 1,030 1,030

20,000 to 30,000 650 650 710 880 1,220 1,610 1,610 1,590

30,000 to 50,000 1,910 1,770 1,880 2,090 2,480 3,480 3,480 3,270

50,000 to 70,000 5,390 5,570 5,740 5,870 6,090 9,610 9,610 9,390

Over 70,000 18,560 20,880 21,060 21,130 21,310 36,310 36,310 36,060

Total 460 420 480 550 680 990 990 980

Note: All information is in terms of individual taxpayers—that is husband and wife are counted separately.
¹Excluding child tax allowances which were being phased out in 1978–79.
²Average gains and losses are calculated by reference to the estimated number who would be liable to pay tax under the indexed 1978–79 regime assuming Independent Taxation; this number is some 1,800,000 greater than the numbers paying tax in 1990–91, some 1,400,000 in the income range below £5,000 and 400,000 in the range £5,000 to £10,000.

Reduction in income tax compared with 1978–79 indexed regime¹ (£ million)

Range of individual's income in 1990–91 (£) Number of individuals paying tax in 1990–91 (million) 1979–80 1984–85 1985–86 1986–87 1987–88 1988–89 1989–90 1990–91

Under 5,000 2.9 230 100 230 270 340 480 480 480

5,000 to 10,000 8.6 1,230 640 1,040 1,360 1,960 2,840 2,850 2,840

10,000 to 15,000 6.4 1,840 1,450 1,800 2,280 3,200 4,390 4,400 4,390

15,000 to 20,000 3.8 1,570 1,410 1,620 2,050 2,870 3,860 3,860 3,860

20,000 to 30,000 2.6 1,710 1,710 1,860 2,320 3,210 4,230 4,230 4,190

30,000 to 50,000 1.0 1,930 1,790 1,900 2,110 2,500 3,510 3,520 3,300

50,000 to 70,000 0.2 1,240 1,280 1,320 1,350 1,400 2,210 2,210 2,160

Over 70,000 0.2 2,970 3,340 3,370 3,380 3,410 5,810 5,810 5,770

TOTAL 25.7 12,720 11,720 13,140 15,120 18,890 27,330 27,360 26,990

Average gain per individual² (£ per annum)
Range of individual's income in 1990–91 (£)	1979–80	1984–85	1985–86	1986–87	1987–88	1988–89	1989–90	1990–91
Under 5,000	50	20	50	60	80	110	110	110
5,000 to 10,000	140	70	120	150	220	320	320	320
10,000 to 15,000	290	230	280	360	500	690	690	690
15,000 to 20,000	420	380	430	550	760	1,030	1,030	1,030
20,000 to 30,000	650	650	710	880	1,220	1,610	1,610	1,590
30,000 to 50,000	1,910	1,770	1,880	2,090	2,480	3,480	3,480	3,270
50,000 to 70,000	5,390	5,570	5,740	5,870	6,090	9,610	9,610	9,390
Over 70,000	18,560	20,880	21,060	21,130	21,310	36,310	36,310	36,060
Total	460	420	480	550	680	990	990	980

Reduction in income tax compared with 1978–79 indexed regime¹ (£ million)
Range of individual's income in 1990–91 (£)	Number of individuals paying tax in 1990–91 (million)	1979–80	1984–85	1985–86	1986–87	1987–88	1988–89	1989–90	1990–91
Under 5,000	2.9	230	100	230	270	340	480	480	480
5,000 to 10,000	8.6	1,230	640	1,040	1,360	1,960	2,840	2,850	2,840
10,000 to 15,000	6.4	1,840	1,450	1,800	2,280	3,200	4,390	4,400	4,390
15,000 to 20,000	3.8	1,570	1,410	1,620	2,050	2,870	3,860	3,860	3,860
20,000 to 30,000	2.6	1,710	1,710	1,860	2,320	3,210	4,230	4,230	4,190
30,000 to 50,000	1.0	1,930	1,790	1,900	2,110	2,500	3,510	3,520	3,300
50,000 to 70,000	0.2	1,240	1,280	1,320	1,350	1,400	2,210	2,210	2,160
Over 70,000	0.2	2,970	3,340	3,370	3,380	3,410	5,810	5,810	5,770
TOTAL	25.7	12,720	11,720	13,140	15,120	18,890	27,330	27,360	26,990