§ Ms HarmanTo ask the Chancellor of the Exchequer when the hon. Member for Peckham will receive an answer to the two questions about the effect of the 1995–96 tax changes, tabled for answer on 31 January.
§ Mr. DorrellToday.
§ Ms HarmanTo ask the Chancellor of the Exchequer if he will update his answer of 19 January,Official Report, columns 635–41, to provide similar estimates of the burden of direct and indirect taxes for 1995–96 to take account of
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Income tax, national insurance contributions and indirect tax payments at multiples of average earnings, 1995–961 Multiples of average earnings 50 75 100 150 200 300 400 500 700 1000 2000 Single Indexed 1978–79 tax system applied in 1995–96 Amounts, £ per week Income tax 41.8 73.60 105.72 173.64 270.72 525.43 823.33 1,146.45 1,792.69 2,762.04 5,993.23 NICs 12.65 19.98 24.05 24.05 24.05 24.05 24.05 24.05 24.05 24.05 24.05 Income tax + NICs 54.14 92.58 129.77 197.69 294.77 549.48 847.38 1,170.50 1,816.74 2,786.09 6,017.28 Percentage of earnings Income tax 21.3 25.2 27.2 29.7 34.8 45.0 52.9 58.9 65.8 70.9 77.0 NICs 6.5 6.5 6.2 4.1 3.1 2.1 1.5 1.2 0.9 0.6 0.3 Income tax + NICs 27.8 31.7 33.3 33.9 37.9 476.0 54.4 60.1 66.7 71.6 77.3 1995–96 tax measures applied in 1995–96 Amounts, £ per week Income tax 28.54 52.87 77.20 132.50 210.36 366.08 521.80 677.52 988.96 1,456.12 3,013.32 NICs 14.75 24.48 34.21 39.78 39.78 39.78 39.78 39.78 39.78 39.78 39.78 Income tax and NICs 43.29 77.35 111.41 172.28 250.14 405.86 561.58 717.30 1,028.74 1,495.90 3,053.10 VAT — 18.89 24.84 37.47 — — — — — — — Other indirect — 22.26 27.45 38.43 — — — — — — — Total — 118.50 163.70 248.18 — — — — — — — Percentage of earnings Income tax 14.7 18.1 19.8 22.7 27.0 31.3 33.5 34.8 36.3 37.4 38.7 NICs 7.6 8.4 8.8 6.8 5.1 3.4 2.6 2.0 1.5 1.0 0.5 Income tax and NICs 22.2 26.5 28.6 29.5 32.1 34.8 36.1 36.9 37.8 38.4 39.2 VAT — 6.5 6.4 6.4 — — — — — — — Other indirect — 7.6 7.1 6.6 — — — — — — — Total — 40.6 42.1 42.5 — — — — — — — Married, no children Indexed 1978–79 tax system applied in 1995–96 Amounts, £ per week Income tax 30.76 62.88 94.99 160.64 252.84 502.20 796.36 1,119.47 1,765.71 273,5.07 5,966.26 NICs 12.65 18.98 24.05 24.05 24.05 24.05 24.05 24.05 24.05 24.05 24.05 Income tax + NICs 43.41 81.85 119.04 184.69 276.89 526.25 820.41 1,143.52 1,789.76 2,759.12 5,990.31 Percentage of earnings Income tax 15.8 21.5 24.4 27.5 32.5 43.0 51.1 57.5 64.8 70.3 76.6 NICs 6.5 6.5 6.2 4.1 3.1 2.1 1.5 1.2 0.9 0.6 0.3 Income tax + NICs 22.3 28.0 30.6 31.6 35.6 45.1 52.7 58.7 65.7 70.9 76.9 1995–96 tax measures applied in 1995–96 Amounts, £ per week Income tax 23.58 47.91 72.24 127.54 205.40 361.12 516.84 672.56 984.00 1,451.16 3,008.36 NICs 14.75 24.48 34.21 39.78 39.78 39.78 39.78 39.78 39.78 39.78 39.78 Income tax and NICs 28.33 72.39 106.45 167.32 245.18 400.90 556.62 712.34 1,023.78 1,490.94 3,048.14 VAT — 17.30 23.72 37.33 — — — — — — — Other indirect — 24.60 29.93 41.12 — — — — — — — Total — 114.29 160.10 245.77 — — — — — — — Percentage of earnings Income tax 12.1 16.4 18.6 21.8 26.4 30.9 33.2 34.6 36.1 37.3 38.6 NICs 7.6 8.4 8.8 6.8 5.1 3.4 2.6 2.0 1.5 1.0 0.5 Income tax and NICs 19.7 24.8 27.3 28.7 31.5 34.3 35.7 36.6 37.6 38.3 39.1 VAT — 5.9 6.1 6.4 — — — — — — — Other indirect — 8.4 7.7 7.0 — — — — — — — Total — 39.1 41.1 42.1 — — — — — — — the tax changes announced for 1995–96, assuming that other aspects of the tax regime are subject to statutory indexation and that prices rise by the amount specified in the working assumption on page 121 of the "Financial Statement and Budget Report 1994–95" and assuming earnings growth in 1995–96 is the same as in 1994–95.
§ Mr. Dorrell[holding answer 31 January 1994]: Estimates of tax payments in 1995–96 on the basis requested are given in the table. The actual tax burden in 1995–96 will depend on decisions taken in the 1994 Budget as well as on changes in prices and earnings.
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Multiples of average earnings 50 75 100 150 200 300 400 500 700 1000 2000 Married, 2 children Indexed 1978–79 tax system applied in 1995–96 Amounts, £ per week Income tax 10.82 42.94 75.06 139.87 230.29 477.85 770.46 1,093.58 1,739.82 2,709.17 5,940.36 NICs 12.65 18.98 24.05 24.05 24.05 24.05 24.05 24.05 24.05 24.05 24.05 Income tax + NICs 23.48 61.92 99.11 163.92 254.34 501.90 794.51 1,117.63 1,763.87 2,733.22 5,964.41 Percentage of earnings Income tax 5.6 14.7 19.3 24.0 29.6 40.9 49.5 56.2 63.8 69.6 76.3 NICs 6.5 6.5 6.2 4.1 3.1 2.1 1.5 1.2 0.9 0.6 0.3 Income tax + NICs 12.1 21.2 25.5 28.1 32.7 43.0 51.0 57.4 64.7 70.2 76.6 1995–96 tax measures applied in 1995–96 Amounts, £ per week Income tax 4.58 28.86 53.19 108.49 186.35 342.07 497.79 653.51 964.95 143,2.11 2,989.31 NICs 14.75 24.48 34.21 39.78 39.78 39.78 39.78 39.78 39.78 39.78 39.78 Income tax and NICs 19.28 53.34 87.40 148.27 226.13 381.85 537.57 693.29 1,004.73 1,471.89 3,029.09 VAT — 17.06 24.40 39.95 — — — — — — Other indirect — 24.62 28.88 37.91 — — — — — — — Total — 95.02 140.68 226.13 — — — — — — — Percentage of earnings Income tax 2.3 9.9 13.7 18.6 23.9 29.3 32.0 33.6 35.4 36.8 38.4 NICs 7.6 8.4 8.8 6.8 5.1 3.4 2.6 2.0 1.5 1.0 0.5 Income tax and NICs 9.9 18.3 22.5 25.4 29.0 32.7 34.5 35.6 36.9 37.8 38.9 VAT — 5.8 6.3 6.8 — — — — — — — Other indirect — 8.4 7.4 6.5 — — — — — — — Total — 32.5 36.2 38.7 — — — — — — — Married, both working, no children Indexed 1978–79 tax system applied in 1995–96 Amounts, £ per week Income tax 11.45 40.12 72.24 136.48 211.44 359.78 556.04 796.15 1,358.40 2,292.90 5,524.09 NICs 12.65 18.98 25.30 37.96 44.29 48.10 48.10 48.10 48.10 48.10 48.10 Income tax + NICs 24.10 59.10 97.55 174.43 255.73 407.88 604.14 844.25 1,406.50 2,341.00 5,572.19 Percentage of earnings Income tax 5.9 13.7 18.6 23.4 27.2 30.8 35.7 40.9 49.8 58.9 70.9 NICs 6.5 6.5 6.5 6.5 5.7 4.1 3.1 2.5 1.8 1.2 0.6 Income tax + NICs 12.4 20.2 25.1 29.9 32.8 34.9 38.8 43.4 51.6 60.1 71.6 1995–96 tax measures applied in 1995–96 Amounts, £ per week Income tax 6.55 28.36 52.12 100.79 149.45 270.93 415.76 571.48 882.92 1,350.08 2,907.28 NICs 10.03 19.76 29.49 48.96 66.20 79.56 79.56 79.56 79.56 79.56 79.56 Income tax and NICs 16.57 48.12 81.61 149.74 215.65 350.49 495.32 651.04 962.48 1,429.64 2,986.84 VAT — 19.57 26.60 40.54 — — — — — — — Other indirect — 28.97 33.59 42.73 — — — — — — — Total — 96.66 141.80 233.01 — — — — — — — Percentage of earnings Income tax 3.4 9.7 13.4 17.3 19.2 23.2 26.7 29.4 32.4 34.7 37.3 NICs 5.2 6.8 7.6 8.4 8.5 6.8 5.1 4.1 2.9 2.0 1.0 Income tax and NICs 8.5 16.5 21.0 25.6 27.7 30.0 31.8 33.4 35.3 36.7 38.4 VAT — 6.7 6.9 6.9 — — — — — — — Other indirect — 9.9 9.6 7.3 — — — — — — — Total — 33.1 36.5 39.8 — — — — — — — 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 couple with two children.
4. Estimates of income tax and National Insurance Contributions in 1995–96 are based on the illustrative assumption of uprating 1994–95 personal allowances, tax thresholds, NIC Lower and Upper earnings limits and the level of Child Benefit in line with the assumption of 3.25 per cent. given in the 1994–95 Financial Statement and Budget Report for the increase in the Retail Price Index in 1995–96.
5. Estimates of income tax and National Insurance Contributions in 1995–96 if the 1978–79 tax regime had been indexed for inflation are based on 894W 895W the assumption that the 1978–79 levels of personal allowances, child tax allowances, tax thresholds, NIC Lower and Upper earnings limits and Child Benefit are indexed to 1995–96 in line with the growth in the RPI. The growth in the RPI in years beyond 1993–94 uses the assumptions for RPI increases for 1994–95 and 1995–96 contained in the 1994–95 Financial Statement and Budget Report.
6. In both cases, average earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence and are assumed to be £38930 per week based on the earnings growth assumption of 4 per cent. for 1995–96.
7. The estimates of most indirect taxes are based on equations derived from the 1985 Family Expenditure Survey, uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power, Airline Passenger Duty and Insurance Premium Tax are based on equations using results from the 1991 and 1992 Family Expenditure Survey respectively, uprated using a similar methodology. These estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
8. 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 variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years.
§ Ms HarmanTo ask the Chancellor of the Exchequer if he will update his answer of 19 January,Official Report, columns 653–41 and, on the same basis as his answer to the hon. Member for Glasgow, Garscadden (Mr. Dewar) of 22 April 1993, Official Report, columns 176–78, provide similar estimates of the burden of direct and indirect taxes
896W
Income tax, national insurance contributions and indirect tax payments at multiples of average earnings, 1994–95 multiples of average earnings 50 75 100 150 200 300 400 500 700 1000 2000 single indexed 1978–79 tax system applied in 1994–95 Amounts, £ per week Income tax 39.70 70.58 101.46 166.53 259.26 503.22 788.90 1,099.57 1,720.91 2,652.91 5,759.60 NICs 12.16 18.25 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 Income tax + NICs 51.87 88.83 124.86 189.93 282.66 526.62 812.30 1,122.97 1,744.31 2,676.31 5,783.00 percentage of earnings Income tax 21.2 25.1 27.1 29.7 34.6 44.8 52.7 58.8 65.7 70.9 76.9 NICs 6.5 6.5 6.3 4.2 3.1 2.1 1.6 1.3 0.9 0.6 0.3 Income tax + NICs 27.7 31.6 33.4 33.8 37.8 46.9 54.3 60.0 66.6 71.5 77.3 1995–96 tax measures applied in 1994–95 Amounts, £ per week Income tax 27.34 50.73 74.13 126.83 201.69 351.41 501.13 650.85 950.29 1,399.45 2,896.65 NICs 14.16 23.51 32.87 38.44 38.44 38.44 38.44 38.44 38.44 38.44 38.44 Income tax and NICs 41.50 74.25 107.00 165.27 240.13 389.85 539.57 689.29 988.73 1,437.89 2,935.09 VAT — 18.12 23.85 35.97 — — — — — — — other indirect — 21.40 26.31 36.74 — — — — — — — Total — 113.76 157.16 237.98 — — — — — — — Percentage of earnings Income tax 14.6 18.1 19. 8 22.6 26.9 31.3 33.-5 34.8 36.3 37.4 38.7 NICs 7.6 8.4 8.8 6.8 5.1 3.4 2.6 2.1 1.5 1.0 0.5 Income tax and NICs 22.2 26.4 28.6 29.4 32.1 34.7 36.0 36.8 37.7 38.4 39.2 VAT — 6.5 6.4 6.4 — — — — — — — Other indirect — 7.6 7.0 6.5 — — — — — — — Total — 40.5 42.0 42.4 — — — — — — — Married, no children Indexed 1978–79 tax system applied in 1994–95 Amounts, £ per week Income tax 29.36 60.24 91.12 154.00 242.02 481.13 762.88 1,073.55 1,694.89 2,626.89 5,733.58 NICs 12.16 18.25 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 Income tax + NICs 41.52 78.49 114.52 177.40 265.42 504.53 786.28 1,096.95 1,718.29 2,650.29 5,756.98 Percentage of gross earnings Income tax 15.7 21.5 24.3 27.4 32.3 42.8 51.0 57.4 64.7 70.2 76.6 NICs 6.5 6.5 6.3 4.2 3.1 2.1 1.6 1.3 0.9 0.6 0.3 Income tax + NICs 22.2 28.0 30.6 31.6 35.5 44.9 52.5 58.6 65.6 70.8 76.9 1995–96 tax measures applied in 1994–95 Amounts, £ per week Income tax 22.38 45.77 69.17 121.87 196.73 346.45 496.17 645.89 945.89 1,394.49 2,891.69 NICs 14.16 23.51 32.87 38.44 38.44 38.44 38.44 38.44 38.44 38.44 38.44 Income tax and NICs 36.53 69.29 102.04 160.31 235.17 384.89 534.61 684.33 983.77 1,432.93 2,930.13 VAT — 16.48 22.64 35.73 — — — — — — — that would take effect in 1994–95 if the tax rates announced for 1995–96 and contained in the "Financial Statement and Budget Report 1994–95", applied in 1994–95.
§ Mr. Dorrell[holding answer 31 January 1994]: Figures illustrating the hypothetical tax burdens in 1995–96 if the measures announced for 1995–96 applied in 1994–95 are given in the table. The actual burden of tax in 1995–96 will depend on decisions taken in the 1994 Budget as well as on changes in prices and earnings.
897W
Multiples of average earnings 50 75 100 150 200 300 400 500 700 1000 2000 Other indirect — 23.71 28.75 39.38 — — — — — — — Total — 109.48 153.42 235.42 — — — — — — — Percentage of earnings Income tax 12.0 16.3 18.5 21.7 26.3 30.9 33.1 34.5 36.1 37.3 38.6 NICs 7.6 8.4 8.8 6.8 5.1 3.4 2.6 2.1 1.5 1.0 0.5 Income tax and NICs 19.5 24.7 27.3 28.6 31.4 34.3 35.7 36.5 37.5 38.3 39.1 VAT — 5.8 6.1 6.3 — — — — — — — Other indirect — 8.5 7.6 7.1 — — — — — — — Total — 39.0 41.0 41.9 — — — — — — — Married, 2 children Indexed 1978–79 tax system applied in 1994–95 Amounts,£per week Income tax 10.05 40.93 71.81 133.88 220.17 457.55 737.80 1,048.47 1,669.81 2,601.82 5,708.51 NICs 12.16 18.25 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 Income tax + NICs 22.22 59.18 95.21 157.28 243.57 480.95 761.20 1,071.87 1,693.21 2,625.22 5,731.91 Percentage of earnings Income tax 5.4 14.6 19.2 23.8 29.4 40.7 49.3 56.0 63.7 69.5 76.3 NICs 6.5 6.5 6.3 4.2 3.1 2.1 1.6 1.3 0.9 0.6 0.3 Income tax + NICs 11.9 21.1 25.4 28.0 32.5 42.8 50.8 57.3 64.6 70.1 76.6 1995–96 tax measures applied in 1994–95 Amounts, £ per week Income tax 3.93 27.32 50.72 103.42 178.28 328.00 477.72 627.44 926.88 1,376.04 2,873.24 NICs 14.16 23.51 32.87 38.44 38.44 38.44 38.44 38.44 38.44 38.44 38.44 Income tax and NICs 18.08 50.84 83.59 141.86 216.72 366.44 516.16 665.88 965.32 1,414.48 2,911.68 VAT — 16.06 23.11 38.06 — — — — — — — Other indirect — 23.79 27.83 36.37 — — — — — — — Total — 90.69 134.52 216.29 — — — — — — — Percentage of earnings Income tax 2.1 9.7 13.5 18.4 23.8 29.2 31.9 33.5 35.4 36.8 38.4 NICs 7.6 8.4 8.8 6.8 5.1 3.4 2.6 2.1 1.5 1.0 0.5 Income tax and NICs 9.7 18.1 22.3 25.3 28.9 32.6 34.5 35.6 36.8 37.8 38.9 VAT — 5.7 6.2 6.8 — — — — — — — Other indirect — 8.5 7.4 6.5 — — — — — — — Total — 32.3 35.9 38.5 — — — — — — — Married, both working, no children Indexed 1978–79 tax system applied in 1994–95 Amounts, £ per week Income tax 10.73 38.18 69.06 130.82 202.92 344.92 532.59 762.48 1,301.70 2,199.13 5,305.82 NICs 12.16 18.25 24.33 36.49 42.86 46.80 46.80 46.80 46.80 46.80 46.80 Income tax + NICs 22.89 56.43 93.39 167.32 245.79 391.72 579.39 809.28 1,348.50 2,245.93 5,352.62 Percentage of earnings Income tax 5.7 13.6 18.5 23.3 27.1 30.7 35.6 40.7 49.7 58.8 70.9 NICs 6.5 6.5 6.5 6.5 5.7 4.2 3.1 2.5 1.8 1.3 0.6 Income tax + NICs 12.2 20.1 25.0 29.8 32.8 34.9 38.7 43.2 51.5 60.0 71.5 1995–96 tax measures applied in 1994–95 Amounts, £ per week Income tax 5.97 26.91 49.72 96.51 143.29 259.63 398.42 548.14 847.58 1,296.74 2,793.94 NICs 9.60 18.95 28.31 47.03 63.82 76.88 76.88 76.88 76.88 76.88 76.88 Income tax and NICs 15.56 45.86 78.03 143.53 207.12 336.51 475.30 625.02 924.46 1,373.62 2,870.82 VAT — 18.59 25.34 38.75 — — — — — — — Other indirect — 28.05 32.42 41.05 — — — — — — — Total — 92.50 135.79 223.33 — — — — — — — Percentage of earnings Income tax 3.2 9.6 13.3 17.2 19.1 23.1 26.6 29.3 32.3 34.6 37.3 NICs 5.1 6.8 7.6 8.4 8.5 6.8 5.1 4.1 2.9 2.1 1.0 Income tax and NICs 8.3 16.3 20.8 25.6 27.7 30.0 31.7 33.4 35.3 36.7 38.3 VAT — 6.6 6.8 6.9 — — — — — — — Other indirect — 10.0 8.6 7.3 — — — — — — — Total — 33.0 36.3 39.8 — — — — — — — 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 898W 899W income from employment. All earners, including wives, are assumed to pay Class I 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 couple with two children.
4.Estimates have been provided on the basis that measures for 1995–96 announced in the 1993 Budgets are implemented in 1994–95, on the basis of 1994–95 levels of earnings and prices and with other tax allowances, thresholds at 1994–95 levels. Estimates have also been provided for tax payments on the basis that the 1978–79 tax regime had been indexed for inflation in line with the growth in the RPI and applied to 1994–95 levels of earnings.
5.Average earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence and are assumed to be £37430 a week based on the illustrative earnings growth assumption of 4 per cent. in 1994–95.
6.The estimates of most indirect taxes are based on equations derived from the 1985 Family Expenditure Survey, uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power are based on equations using results from the 1991 Family Expenditure Survey, uprated using a similar methodology. These estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
7.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 variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years.