§ Mr. Tom ClarkeTo ask the Chancellor of the Exchequer by how much the single person's allowance could be increased at a revenue cost of £1 billion in 1991–92 in Great Britain and Northern Ireland with (i) the current system of tax allowances and (ii) all tax allowances and reliefs restricted to the basic rate except the single person's allowance.
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§ Mr. MaudeRaising the personal allowance by £150 for all taxpayers (including those aged 65 and over) would cost about £1 billion in a full year at 1991–92 levels of income.
The yield from restricting all allowances and reliefs except the personal allowance to the basic rate would be about £900 million. This equates approximately to the revenue cost of raising the personal allowance for all taxpayers by a further £140.
§ Mr. Tom ClarkeTo ask the Chancellor of the Exchequer what would be the revenue cost of allowing couples to split the married couple's allowance as would be most financially beneficial in(a) the first year and (b) a full year, assuming this is introduced at the beginning of 1991–92, and (c) the first year and (d) a full year, assuming this is introduced at the beginning of 1992–93, in Great Britain and Northern Ireland with (i) the current system of tax allowances and (ii) all tax allowances and reliefs restricted to the basic rate except the single person's allowance.
§ Mr. MaudeUnder the current system of tax allowances the revenue cost is estimated to be about £10 million in a full year at both 1991–92 and 1992–93 income levels. If the married couple's allowance were restricted to the basic rate, no couples would gain from the proposed change and there would be no revenue cost.
§ Mr. Tom ClarkeTo ask the Chancellor of the Exchequer what would be the revenue yield from freezing the married couple's allowance, additional personal allowance and widow's bereavement allowance, (but not the married couple's allowance for pensioners) in Great Britain and Northern Ireland,(a) in the first year and (b) in a full year, assuming this is introduced at the beginning of 1991–92, (c) in the first year and (d) in a full year, assuming this is introduced at the beginning of 1992–93, with full compensatory increases, at the basic rate, in (i) one-parent benefit, (ii) one-parent benefit and means-tested benefits for single parents, (iii) one parent benefit
Full year cost of reduced rate hands at 1991–92 income levels £ million Reduced rate Taxable income subject to reduced rate (£) 20 per cent. 21 per cent. 22 per cent. 23 per cent. 24 per cent. 1,000 1,200 960 720 480 240 2,000 2,290 1,830 1,370 910 460 3,000 3,280 2,620 1,970 1,310 660 4,000 4,170 3,340 2,500 1,670 830 5,000 4,970 3,980 2,980 1,990 990 8,000 6,800 5,440 4,080 2,720 1,360 10,000 7,650 6,120 4,590 3,060 1,530
Full year cost of reduced rate bands at 1991–92 income levels £ Reduced rate Taxable income subject to reduced rate (£) 20 per cent. 21 per cent. 22 per cent. 23 per cent. 24 per cent. 1,000 1,190 960 720 480 240 2,000 2,280 1,830 1,370 910 460 3,000 3,280 2,620 1,970 1,310 660 4,000 4,180 3,350 2,510 1,670 840 5,000 5,000 4,000 3,000 2,000 1,000 8,000 6,900 5,520 4,140 2,760 1,380 10,000 7,810 6,250 4,690 3,120 1,560 The effect on tax receipts in the first year would depend on administrative arrangements following such a change.
254Wand the widowed mothers' allowance, (iv) one parent benefit and the widowed mothers' allowance and means-tested benefits for single parents and widows, with (1) the current system of tax allowances, and (2) restricting all tax allowances and reliefs except the single person's allowance to the basic rate.
§ Mr. MaudeIt is estimated that, at 1992–93 levels of income, freezing the married couples allowance (for taxpayers aged under 65), the additional personal allowance, and the widow's bereavement allowance in 1992–93 would yield about £140 million in the first year, and £180 million in a full year compared with the illustrative 4 per cent. indexation shown in table 4.2 of the autumn statement 1991. These allowances were not increased in the 1991 Budget.
It is not administratively possible to compensate taxpayers fully and accurately through the benefits system in the way suggested. The benefit system cannot distinguish between taxpayers and non-taxpayers, nor can it take account of a person's tax liability at a particular point in time.
§ Mr. Tom ClarkeTo ask the Chancellor of the Exchequer what would be the effect on tax revenues(a) in the first year and (b) in a full year, assuming this is introduced at the beginning of 1991–92, and (c) in the first year and (d) in a full year, assuming this is introduced at the beginning of 1992–93, of the income tax at (1) 20 per cent., (2) 21 per cent., (3) 22 per cent., (4) 23 per cent., (5) 24 per cent., on the first (i) £1,000, (ii) £2,000, (iii) £3,000, (iv) £4,000, (v) £5,000, (vi) £8,000 and (vii) £10,000 of annual taxable income, in Great Britain and Northern Ireland.
§ Mr. MaudeEstimates are as follows. They assume that the basic rate limit (higher rate threshold) would not be affected by the introduction of the reduced rate band.
§ Mr. Nicholas BrownTo ask the Chancellor of the Exchequer how many(a) men, (b) women, (c) pensioners and (d) non-pensioners would be affected by 255W restricting all tax allowances and reliefs except the single person's allowance to the basic rate in Great Britain and Northern Ireland, respectively, in 1991–92, giving the numbers of each (i) who earn above the 40 per cent. threshold, (ii) who earn below the 40 per cent. threshold,
Restriction of allowances1 and reliefs to the basic rate Number of taxpaying individuals affected Thousands Higher rate taxpayers Basic rate taxpayers Affected by restriction of MCA only Brought into higher rate (a) Men 1,340 270 320 270 (b) Women 150 20 — 20 (c) Aged 65 and over 90 10 40 10 (d) Aged under 65 1,400 280 280 280 1Except for the personal allowance. Separate estimates for Great Britain and Northern Ireland are not available.
§ Mr. Nicholas BrownTo ask the Chancellor of the Exchequer what would be the cost of a(a) £100, (b) £200 and (c) £300 increase in the single person's allowance in Great Britain and Northern Ireland, (i) in the first year, (ii) in a full year, assuming this is introduced at the beginning of 1991–92, (iii) in the first year and (iv) in a full year,
Cost under current system of tax allowances (£ million) 1991–92 1992–93 Increase in the personal allowance (£) First year Full year First year Full year 100 500 650 500 650 200 1,000 1,300 1,000 1,300 300 1,500 1,950 1,500 1,950
Cost following the restriction of all tax allowances and reliefs (except the personal allowance) to the basic rate (£ million) 1991–92 1992–93 Increase in the personal allowance (£) First year Full year First year Full year 100 550 700 550 700 200 1,050 1,350 1,050 1,350 300 1,550 2,050 1,550 2,000 The numbers taken out of tax in either year are estimated to be (a) 200,000, (b) 500,000 and (c) 700,000.