§ Mr. Nicholas BrownTo ask the Chancellor of the Exchequer how many people will pay more tax in 1991–92 as a result of the ending of the composite rate of tax; and what is the average amount more that they will pay.
§ Mr. Maude[ holding answer 25 February 1991]: The effect of the composite rate system in 1991–92, had it continued (and assuming a basic rate of 25 per cent.), would have been broadly to transfer £1 billion of the tax liabilities of about 20 million taxpayers, an average of £50, on to about 14 million non-taxpayers, whose interest would have borne an average of £70 tax that they could not reclaim. The result of ending composite rate tax will be to place tax liabilities on bank and building society interest where they properly belong. Taxpayers may in practice reduce these liabilities by taking advantage of a tax-exempt special savings account (TESSA).