§ Mr. Chris SmithTo ask the Chancellor of the Exchequer what is the average individual cumulative gain(a) in current prices, (b) in 1988–89 prices and (c) in 1990–91 prices to those earning £5,000, £10,000, £15,000, £20,000, £25,000, £30,000, £40,000, £50,000, £60,000, and £70,000 as a result of changes in taxation and national insurance since 1979.
§ Mr. LilleyEstimates of the annual change in liability resulting from the changes in income tax rates, allowances, and thresholds and national insurance contribution rates and limits are in the table. All estimates are based on a provisional 1989–90 income base projected from the 1987–88 survey of personal incomes. The 1978–79 income tax regime has been indexed to 1989–90 levels by reference to the statutory formula and national insurance contribution limits have been indexed by the change in the RPI between October 1977 and October 1988. The post-October 1989 NIC rates are used for 1989–90.
For the purposes of these calculations, the indexed regimes of 1978–79 are directly applied to the income base of 1989–90. In practice, retention of these regimes, indexed as appropriate, for the intervening years would have led to changes in the income base.
Average reduction in income tax and National Insurance contributions per tax unit1 in 1989–90 compared with 1978–79 indexed regimes £ per annum Range of total income in 1989–90 (£) At 1988–89 prices At 1989–90 prices At 1990–91 prices Under 5,000 140 150 160 5,000 to 10,000 290 310 320 10,000 to 15,000 510 550 590 15,000 to 20,000 680 730 780 20,000 to 25,000 960 1,030 1,090 25,000 to 30,000 1,360 1,470 1,550 30,000 to 40,000 2,070 2,220 2,360 40,000 to 50,000 3,860 4,150 4,400 50,000 to 60,000 6,390 6,870 7,280 60,000 to 70,000 9,540 10,260 10,870 Over 70,000 29,970 32,220 34,150 Total all incomes 870 930 990 1 Married couples and single people paying either income tax or NIC under the 1978–79 indexed regimes.
§ Mr. Chris SmithTo ask the Chancellor of the Exchequer (1) what is the reduction in annual liability to(a) capital gains tax and (b) capital transfer tax in 1989–90 and 1990–91 as against the 1979–80 indexed regime, specifying in each case the total and average reduction per taxpayer as well as the number of taxpayers in each year;
(2) what is the reduction in annual liability to (a) capital gains tax and (b) capital transfer tax in 689W 1989–90 and 1990–91 as against the 1978–79 indexed regime specifying in each case the total and average reduction per taxpayer as well as the number of taxpayers in each year.
§ Mr. LilleyLatest available estimates for 1989–90 and for 1990–91, based on the 1989–90 regime with statutory indexation, are as follows:
Head of tax and regime for comparison Capital gains tax Capital transfer tax/Inheritance tax Indexed 1978–79 Indexed 1979–80 Indexed 1978–79 Indexed 1979–80 Reduction under present regime in: Total liability (£ million): 1989–90 1,400 1,450 680 820 1990–91 1,350 1,400 650 780 Average liability1 (£): 1989–90 2,100 1,950 8,900 10,100 1990–91 2,450 2,300 9,400 10,400 Taxpayer numbers (thousands) Indexed regime: 1989–90 670 730 77 81 1990–91 550 600 68 75 1 The reduction in the average liability is calculated using estimated numbers of taxpayers under the indexed 1978–79 or 1979–80 regime. The numbers of taxpayers based on the tax regimes in force in 1989–90 and in 1990–91, assuming statutory indexation of the 1989–90 regimes, are:
Total investment income and earned income (£ billion) Group of income taxpayers 1988–89 1989–90 Investment Income Earned Income Investment Income Earned Income Top 1 per cent. 4.5 14.7 5.8 16.2 Top 5 per cent. 9.1 43.2 11.6 47.7 Top 10 per cent. 11.9 68.6 15.6 75.5 Top 20 per cent. 15.8 107.6 20.8 118.5 Top 25 per cent. 17.2 124.2 22.7 136.8 Bottom 70 per cent. 9.8 119.4 12.6 131.9 Bottom 50 per cent. 6.2 69.9 7.9 77.1 All taxpayers 28.1 259.0 36.9 285.2