§ Mr. AllenTo ask the Chancellor of the Exchequer (1) how much revenue would be raised if tax was levied at 50 per cent. for those earning £50,000 and above, 45 per cent. for those earning £40,000 to £50,000, the 40 per cent. band remained as at present and the upper earnings limit was removed;
(2) how much revenue would be raised if tax was levied at 50 per cent. for those earning £50,000 and above, 45 per cent. for those earning £40,000 to £50,000 and the 40 per cent. band remained as at present.
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§ Mr. Ryder[holding answer 23 July 1990]: The yield in a full year at 1990–91 levels of income of introducing the rates of income tax shown in the table is estimated to be about £500 million.
Taxable income £ Rate Per cent. 1–20,700 25 20,701–40,000 40 40,001–50,000 45 50,001 and over 50 Taxable income is income subject to tax from all sources after deducting allowances and reliefs.
The estimate does not take account of the consequential effect on capital gains tax, nor does it allow for any behavioural effects that might result from such an increase.
The additional yield from abolishing the upper earnings limit for employees' class 1 national insurance contributions is estimated to be £2½ billion.