HC Deb 01 May 1991 vol 190 cc217-8W
Mr. Nicholas Brown

To ask the Chancellor of the Exchequer (1) if he will publish a table showing the yield of restricting (i) the personal tax allowance, (ii) the married couple's allowance, (iii) the age allowances and (iv) the major tax reliefs to the basic rate of tax in 1991–92;

(2) if he will estimate the effect on Treasury revenues in 1991–92 of limiting all tax reliefs and allowances, apart from personal allowances, to the basic rate of tax, where available giving separate figures for different reliefs.

Mr. Maude

[holding answer 30 April 1991]: The latest estimates of the direct revenue yields in a full year with the proposed 1991–92 levels of allowances and tax rates are as follows:

£ million
Personal tax allowances (excluding married couples allowance) 980
Married couple's allowance 340
Age allowances1 Nil
Relief on contributions to personal pensions2 3150
Relief on employee's contributions to occupational pension schemes 250

1The higher levels of the age-related personal and married couple's allowances given to those aged 65 and over subject to the income limit.

2Including relief for retirement annuity premia and free standing additional voluntary contributions.

3 This estimate is subject to a wide margin of error.

The direct revenue yield from restricting all reliefs and allowances to the basic rate is likely to be of the order of £2,200 million, somewhat more than the sums of the yields from restricting the reliefs and allowances separately; this is due to the cumulative effect of bringing more people into higher rate tax. No account has been taken of possible behavioural changes resulting from such a restriction.

Mr. Battle

To ask the Chancellor of the Exchequer how many additional individuals would be liable to income tax at the higher rate in 1991–92 if all reliefs and allowances, apart from personal tax allowances, were limited to the basic rate of tax.

Mr. Maude

About 200,000 additional individuals would be liable to income tax at the higher rate compared with the number so liable under the Budget proposals.