Incomes (Hansard, 3 February 1994)

§ Sir David Knox
To ask the Chancellor of the Exchequer what percentages of earnings, plus child benefit where appropriate, were taken in income tax and national insurance contributions from each of(a) a single person, (b) a single wage married couple with two children and (c) a single wage married couple with four children at (i) half average male manual earnings, (ii) three quarters male manual earnings, (iii) average male manual earnings and (iv) twice male manual earnings, in the tax years 1990–91 and 1992–93; and what the comparable figures are expected to be for 1993–94.

§ Mr. Dorrell
The information is in the tables:826W

Income tax and national insurance contributions¹ as a percentage of gross earnings plus child benefit

²Multiple of average earnings Single Married, one earner, with two children Married, one earner, with four children

1990–91

½ 19.5 11.4 10.3

¾ 24.4 18.4 17.1

1 26.8 22.1 20.9

2 28.8 25.4 24.7

1992–93

½ 17.6 10.3 9.3

¾ 23.1 17.5 16.4

1 25.8 21.4 20.3

2 28.2 25.3 24.6

1993–94

½ 17.7 10.7 9.7

¾ 23.2 17.7 16.6

1 25.9 21.5 20.4

2 28.7 25.6 24.9

¹ National Insurance contributions are at the standard class 1 rate for employees not contracted-out of the state additional (earnings related) pension scheme. Tax is calculated assuming no allowances or reliefs are available other than the standard allowance.

² Average earnings are taken to be the average gross weekly manual earnings of full-time males on adult rates with pay unaffected by absence. These are £244.50 and £272.00 in 1990£91 and 1992£93 respectively. In 1993£94 these are estimated to be £281.50 using an illustrative growth rate of 3.5 per cent.

§ Sir David Knox
To ask the Chancellor of the Exchequer if he will publish a table showing tax--free incomes, defined as income tax thresholds plus child benefits, as percentages of average male manual earnings for single wage families with one, two, three and four children in each year since 1979–80.

§ Mr. Dorrell
The figures in the table give the levels of income at which there is no net deduction from income, after allowing for the effect of tax allowances, tax rates and child benefit.

Break-even point¹ for a married man expressed as a percentage of average male manual earnings²

With one child With two children With three children With four children

³1978–79 49.2 61.8 74.1 87.0

1979–80 50.8 64.2 77.5 90.9

1980–81 48.2 60.6 73.0 85.4

1981–82 45.5 58.5 71.4 84.4

1982–83 47.9 61.3 74.7 88.1

1983–84 50.5 64.3 78.2 92.0

1984–85 52.5 66.5 80.5 94.5

1985–86 53.2 67.0 80.6 94.3

1986–87 5.30 66.7 80.3 93.9

1987–88 51.9 65.9 79.9 93.9

1988–89 51.8 65.7 79.6 93.5

1989–90 50.1 63.0 75.9 88.7

1990–91 49.0 60.9 72.7 84.6

1991–92 50.5 61.9 73.2 84.6

1992–93 53.5 65.0 76.5 87.9

⁴1993–94 52.9 64.4 75.9 87.4

¹ The level of earnings at which income tax paid is equal to the money received through child benefit.

² Full-time males paid at adult rates working a full week.

³ First two children aged under 11; third aged between 11 and 15 and fourth aged 16 or over.

⁴ Assuming that the husband receives the full married couple's allowance. Provisional.

827W

Income tax and national insurance contributions¹ as a percentage of gross earnings plus child benefit
²Multiple of average earnings	Single	Married, one earner, with two children	Married, one earner, with four children
1990–91
½	19.5	11.4	10.3
¾	24.4	18.4	17.1
1	26.8	22.1	20.9
2	28.8	25.4	24.7
1992–93
½	17.6	10.3	9.3
¾	23.1	17.5	16.4
1	25.8	21.4	20.3
2	28.2	25.3	24.6
1993–94
½	17.7	10.7	9.7
¾	23.2	17.7	16.6
1	25.9	21.5	20.4
2	28.7	25.6	24.9
¹ National Insurance contributions are at the standard class 1 rate for employees not contracted-out of the state additional (earnings related) pension scheme. Tax is calculated assuming no allowances or reliefs are available other than the standard allowance.
² Average earnings are taken to be the average gross weekly manual earnings of full-time males on adult rates with pay unaffected by absence. These are £244.50 and £272.00 in 1990£91 and 1992£93 respectively. In 1993£94 these are estimated to be £281.50 using an illustrative growth rate of 3.5 per cent.

Break-even point¹ for a married man expressed as a percentage of average male manual earnings²
	With one child	With two children	With three children	With four children
³1978–79	49.2	61.8	74.1	87.0
1979–80	50.8	64.2	77.5	90.9
1980–81	48.2	60.6	73.0	85.4
1981–82	45.5	58.5	71.4	84.4
1982–83	47.9	61.3	74.7	88.1
1983–84	50.5	64.3	78.2	92.0
1984–85	52.5	66.5	80.5	94.5
1985–86	53.2	67.0	80.6	94.3
1986–87	5.30	66.7	80.3	93.9
1987–88	51.9	65.9	79.9	93.9
1988–89	51.8	65.7	79.6	93.5
1989–90	50.1	63.0	75.9	88.7
1990–91	49.0	60.9	72.7	84.6
1991–92	50.5	61.9	73.2	84.6
1992–93	53.5	65.0	76.5	87.9
⁴1993–94	52.9	64.4	75.9	87.4
¹ The level of earnings at which income tax paid is equal to the money received through child benefit.
² Full-time males paid at adult rates working a full week.
³ First two children aged under 11; third aged between 11 and 15 and fourth aged 16 or over.
⁴ Assuming that the husband receives the full married couple's allowance. Provisional.