HC Deb 17 June 1992 vol 209 cc530-5W
Mr. Ralph Howell

To ask the Chancellor of the Exchequer if he will show in league order the income tax thresholds in each member state of the European Community with the lowest at the end.

Mr. Dorrell

Estimates based on the latest available information are given in the table. Unless otherwise stated the figures relate to 1992.

The threshold is the amount of gross income below which no tax is payable.

Thresholds given relate to a single person, and to income from employment only. Standard deductions available to all employees have been taken into account.

Using the exchange rates published in the Financial Times on 16 June 1992 the league order is as follows:

Country Threshold £
France 6,445
Luxembourg 5,739
Spain 4,294
Belgium 4,190
Greece 3,752
United Kingdom 3,445
Italy 3,421
Germany 3,244
Ireland 3,206
Denmark 2,895
Portugal 2,167
Netherlands 1,461

Mr. Ralph Howell

To ask the Chancellor of the Exchequer if he will state in pounds sterling how much would be deducted in income tax from(a) a single person and (b) a married couple if their overall income was equivalent to (i) £100 per week, and (ii) £200 per week in each member state of the European Community.

Mr. Dorrell

Estimates based on the latest available information are given in the table. Unless otherwise stated, the figures relate to 1992.

All amounts given in the table relate to weekly income and tax due and to income from employment only. For married couples it has been assumed that only one spouse is in employment and that the couple have no children.

Social security contributions are not included in the table, but have been taken into account in calculating tax due where there is tax relief for such contributions. In some countries, social security contributions will be much

Income Tax, NICs and indirect Tax payments at multiples of average earnings, 1978–79—percentages of gross earnings
Multiples of Average Earnings
0.5 Per cent. 1 Per cent. 1.5 Per cent. 2 Per cent. 5 Per cent. 10 Per cent.
(a) Single person
Income Tax 17.0 25.0 27.7 29.5 50.5 66.6
NICs 6.5 6.5 5.6 4.2 1.7 0.8
Total income tax and NICs 23.6 31.5 33.3 33.7 52.2 67.5
VAT 2.7 2.8
Other indirect 8.2 7.5
Total excluding Domestic Rates 42.5 43.7
Domestic Rates 3.1 2.8
Total 45.6 46.5
(b) Married couple, both partners working
Income Tax 0.0 13.3 19.9 23.1 33.5 50.9
NICs 6.5 6.5 6.5 6.5 3.4 1.7
Total income tax and NICs 6.5 19.8 26.4 29.6 36.8 52.6
VAT 3.1 3.1
Other indirect 10.4 8.7
Total excluding Domestic Rates 33.2 38.2
Domestic Rates 3.4 2.5
Total 36.6 40.7
(c) Married couple, one partner working
Income Tax 9.5 21.3 25.2 27.2 48.8 65.7
NICs 6.5 6.5 5.6 4.2 1.7 0.8
Total income tax and NICs 16.0 27.8 30.8 31.4 50.5 66.5
VAT 2.6 2.8
Other indirect 9.3 8.3
Total excluding Domestic Rates 39.7 41.9
Domestic Rates 3.0 2.5
Total 42.6 44.4
(d) Married couple with two children, one partner working
Income Tax -4.1 14.4 20.6 23.7 47.1 64.8
NICs 6.5 6.5 5.6 4.2 1.7 0.8
Total income tax and NICs 2.5 20.9 26.2 27.9 48.8 65.6

more significant than income tax for people at these levels of earnings. Using the exchange rates published in the Financial Times on 16 June 1992 the information is as follows:

Tax due on earnings (£/week)
weekly earnings
Country Single person Married couple
£100 £200 £100 £200
Belgium 7.31 47.88 3.62 28.63
Denmark 48.40 122.82 23.44 97.86
France nil 19.95 nil 7.74
Germany 10.59 9.24 3.26 6.35
Greece nil 2.37 nil 0.81
Ireland 14.27 50.06 nil 33.72
Italy 6.57 34.17 0.30 27.91
Luxembourg nil 17.56 nil 2.32
Netherlands 11.65 26.28 7.67 22.31
Portugal 1.53 5.27 0.46 4.19
Spain 2.18 26.02 nil 15.99
United Kingdom 6.75 31.51 0.13 23.25

Mr. Nigel Griffiths

To ask the Chancellor of the Exchequer if he will publish a table showing the direct and indirect tax burden in 1978–79 and in 1992–93 as a proportion of gross earnings for(a) a single person, (b) a married couple both working, (c) a married couple with one partner working, (d) a married couple with two children, one partner working and (e) a married couple with two children, both working at 50 per cent., 100 per cent., 150 per cent., 200 per cent., 500 per cent. and 1,000 per cent. of earnings.

Mr. Dorrel

[holding answer 16 June 1992]: The requested figures for 1978–79 and latest estimates for 1992–93 are given in the table.

Multiples of Average Earnings
0.5 Per cent. 1 Per cent. 1.5 Per cent. 2 Per cent. 5 Per cent. 10 Per cent.
VAT 2.7 2.7
Other indirect 8.7 7.3
Total excluding Domestic Rates 32.2 36.2
Domestic Rates 3.0 2.7
Total 35.3 38.9
(e) Married couple with two children, both partners working
Income Tax -11.1 6.4 15.3 19.7 31.9 50.0
NICs 6.5 6.5 6.5 6.5 3.4 1.7
Total income tax and NICs -4.6 12.9 21.8 26.2 35.2 51.7
VAT 3.4 3.4
Other indirect 11.0 9.1
Total excluding Domestic Rates 27.3 34.3
Domestic Rates 3.5 2.6
Total 30.8 36.9

Income Tax, NICs and indirect tax payments at multiples of average earnings, 1992–93—percentages of gross earnings
Multiples of Average Earnings
0.5 Per cent. 1 Per cent. 1.5 Per cent. 2 Per cent. 5 Per cent. 10 Per cent.
(a) Single person
Income Tax 14.5 19.7 21.6 26.2 34.5 37.2
NICs 6.8 7.9 6.2 4.7 1.9 0.9
Total income tax and NICs 21.3 27.7 27.9 30.9 36.4 38.2
VAT 5.8 6.0
Other indirect 6.9 6.5
Total excluding Community Charge 40.4 40.3
(b) Married couple, both partners working
Income Tax 1.1 12.1 16.4 18.6 28.2 34.1
NICs 4.7 6.8 7.6 7.7 3.7 1.9
Total income tax and NICs 5.8 19.0 24.0 26.3 32.0 36.0
VAT 6.4 6.6
Other indirect 8.3 7.1
Total excluding Community Charge 33.7 37.7
(c) Married couple, one partner working
Income Tax 9.8 17.4 19.9 24.3 33.7 36.9
NICs 6.8 7.9 6.2 4.7 1.9 0.9
Total income tax and NICs 16.6 25.3 26.1 29.0 35.6 37.8
VAT 5.6 6.1
Other indirect 7.6 7.0
Total excluding Community Charge 38.5 39.2
(d) Married couple with two children, one partner working
Income Tax -0.1 12.4 16.6 21.9 32.7 36.4
NICs 6.8 7.9 6.2 4.7 1.9 0.9
Total income tax and NICs 6.7 20.4 22.8 26.5 34.6 37.3
VAT 5.8 6.5
Other indirect 7.2 6.3
Total excluding Community Charge 33.4 35.7
(e) Married couple with two children, both partners working
Income Tax -8.8 7.2 13.1 16.1 27.2 33.6
NICs 4.7 6.8 7.6 7.7 3.7 1.9
Total income tax and NICs -4.1 14.0 20.7 23.8 31.0 35.5
VAT 6.9 6.9
Other indirect 8.7 7.3
Total excluding Community Charge 29.6 34.9

Notes to Tables 1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay class 1 NI contributions at the contracted-in rate. 2. Since 1990–91, husbands and wives have been taxed independently. Previously the tax liability of couples depended on their joint income. To permit comparisons with earlier years, the table therefore shows income tax and national insurance contributions paid by a married couple as a proportion of their joint income, assuming, as in the earlier years, that where both partners are earners, the husband and wife share the relevant multiple of earnings in the ratio 60:40.

3. In order to provide comparability with 1978–79, when support for children was given partly through child tax allowance, child benefit is treated as a negative income tax for the married couples with two children. The figures for 1978–79 assume that both children are aged younger than 11 years. 4. Average earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. These are estimated to be £329.90 per week in 1991–92 and £351.40 per week in 1992–93, using the Government Actuary's Department's assumption of 6½ per cent. growth in whole economy underlying earnings over 1991–92. 5. The estimates of indirect taxes are based on equations derived from the 1985 family expenditure survey, uprated to later years using forecasts of aggregate tax receipts. They are based on the illustrative assumption that 10 per cent. of disposable income is saved. There are wide variations in spending patterns between households with the same composition and similar incomes and estimated payments of VAT and other indirect taxes are therefore approximate, even within the income range for which figures are shown. Outside this range, the margin of error is even higher and reliable estimates cannot be made. Because of sampling variations, there can be substantial differences between estimates obtained from family expenditure surveys for different years. 6. It has not been possible to make satisfactory estimates of the burden of the 1992–93 community charge in the absence of sample survey results, which would enable actual payments net of adjustments arising from the community charge reduction scheme and community charge benefit to be related to earnings.

Mr. Nigel Griffiths

To ask the Chancellor of the Exchequer what was the change in taxation per individual arising from each relevant component of the 1992 Budget, both at current prices and net of indexation, for those at one half and three-quarters of average earnings, average earnings, and one-and-a-half, two, five and 10 times average earnings; and if he will provide comparable figures for each budget since 1979.

Mr. Dorrell

[holding answer 16 June 1992]: Individuals will be affected directly or indirectly by most Budget measures. Changes in individual tax burdens will depend not simply on the level of income of the individual in question but also on their specific circumstances. It is therefore not possible to provide an assessment of the impact of the measures contained in the 1992 Budget, or in previous Budgets, in the form requested.

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