§ Mr. BettsTo ask the Chancellor of the Exchequer if he will list the reliefs and exemptions on income tax; and what will be the cost of each to the Exchequer(a) in 1993–94 and (b) in 1994–95.
§ Mr. DorrellEstimates of the cost of income tax reliefs and exemptions for 1993–94 are available in table 9 of the "Tax Ready Reckoner and Tax Reliefs" booklet published by HM Treasury in July. Estimates for 1994–95 will be published next summer.
§ Mr. DewarTo ask the Chancellor of the Exchequer if he will update the answer given to the hon. Member for Wallasay (Ms Eagle) 16 July,Official Report, column 700, giving estimates for 1994–95 and for a full year.
§ Mr. DorrellLatest available estimates from the 1991–92 survey of personal incomes projected to 1994–95 are given in the following table. For 1994–95 it was announced in the March Budget that from 6 April 1994 mortgage interest relief and the married couple's and related allowances would be restricted to 20 per cent. and so these effects are incorporated into the base and excluded from the table. No account has been taken of possible behavioural changes resulting from the restrictions and figures for the major allowances and reliefs show the yield from restricting each allowance or relief separately. If two or more were restricted the total yield would be greater than the sum of figures for individual allowances. It is not
Increase in income after tax1 (£ per week) compared with indexation2 in 1994–95 for a married man3 with two children Multiple of average earnings4 ½ ¾ 1 1½ 2 5 10 Increase derived from (i) 1p cut in basic rate 0.63 1.57 2.51 4.08 4.08 4.08 4.08 (ii) 8.8 per cent. increase in personal allowance 1.62 1.62 1.62 2.31 2.31 2.31 2.31 (iii) increase in child benefit (a) £3.75 per week per child5 7.50 7.50 7.50 7.50 7.50 7.50 7.50 (b) £2.55 per week per child6 5.10 5.10 5.10 5.10 5.10 5.10 5.10 (iv) £1,900 increase in width of 20 per cent. band 2.29 2.29 2.29 2.29 2.29 2.29 2.29 1 Disregarding any change to entitlement to social security income—related benefits except in item (iii)b. 2 Calculations based on the standard assumption that 1993–94 allowances and the basic rate limit have been indexed by 1.8 per cent. with the lower rate band increased to £3,000 as announced in March 1993. 3 Assumed to have no tax reliefs and allowances other than the personal allowance and the married couple's allowance. 4 Average earnings assumed to be £37610 per week. 5 Assuming no change in income support and family credit children's rates. 6 Assuming corresponding changes in income support and family credit children's rates.
§ Mr. MandelsonTo ask the Chancellor of the Exchequer how much tax for 1992 has been remitted or written off as irrecoverable; and how much of this is PAYE contributions.
§ Mr. DorrellThe amount of tax that has been remitted or written off as irrecoverable for 1992 is as follows:
Year Amount in thousands 1992 1,694,246 The amount of this that relates to PAYE contributions is as follows:
116Wpossible to provide estimates of the first-year effects as the yield would depend on the administrative arrangements which implemented the changes.
£ million Estimated full-year yield of restriction to basic rate 20 per cent. All allowances and reliefs 2,420 7,350 Personal allowance (excluding age-related addition) 1,420 5,500 Age-related personal allowance1 0 120 Pension contribution reliefs2 620 1,230 1 The higher level of age-related personal allowance given to those aged 65 and over, subject to the income limit. 2 Employees' contributions to occupational pension schemes and contributions to personal pensions including retirement annuity premia and free-standing additional voluntary contributions.
§ Mr. DewarTo ask the Chancellor of the Exchequer if he will update the answer to the hon. Member for Newcastle upon Tyne, East (Mr. Brown) 11 January,Official Report, column 546, giving estimates for 1994–95, and including estimates of the effects of widening the 20 per cent. band of tax.
§ Mr. DorrellThe effects of the various changes to income tax and child benefit on a married man with two children are shown in the table. Each of the changes would cost £1.8 billion a year; that is the cost in a full year of a 1p cut in the basic rate of income tax. Estimates are based on projections of the 1991–92 survey of personal incomes.
Year Amount in thousands 1992 381,172
§ Mr. DewarTo ask the Chancellor of the Exchequer if he will update the answer of 25 February,Official Report, column 682 on the tax liabilities of taxpayers in different income bands, giving figures for 1993–94 and estimates for 1994–95 based on the assumption of statutory indexation and including measures already announced in the 1993 Budget.
§ Mr. DorrellLatest estimates of the average reductions in income tax and national insurance contribution liabilities in 1993–94 and in 1994–95, assuming statutory indexation and inclusion of measures already announced, 117W compared with liabilities under an indexed 1987–88 regime are in the table. An equivalent assumption has been made about indexation of the national insurance regime for
Average reduction in 1993–94 compared with 1987–88 indexed regime Average reduction or increase (—) in 1994–95 compared with 1987–88 indexed regime Range of individual's income in 1993–94 or 1994–95 £ Income tax £ Income tax and national insurance £ Income tax Income tax and national insurance £ Under 5,000 60 70 60 70 5,000–10,000 170 240 180 220 10,000–15,000 260 400 230 290 15,000–20,000 340 480 270 290 20,000–25,000 420 540 330 300 25,000–30,000 490 600 370 310 30,000–40,000 300 400 30 -40 40.000–50,000 590 680 240 170 50,000–70,000 1,970 2,050 1,540 1,460 70,000–80,000 4,740 4,810 4,100 4,020 over 80,000 19,500 19,600 19,100 19,000 Average 420 500 370 390 For the purpose of the calculations the indexed regime of 1987–88 has been applied directly to the income bases of 1993–94 and 1994–95. In practice, retention of the 1987–88 regime, indexed as appropriate, for the intervening years would have led to changes in the income base.