HC Deb 27 February 1996 vol 272 cc485-7W
Mr. Pearson

To ask the Chancellor of the Exchequer (1) if he will update his answer to the hon. Member for Hartlepool (Mr. Mandelson) of 14 July 1993,Official Report, column 515–16 on the introduction of an upper limit for income tax allowances and reliefs for the years 1995–96 and 1996–97

Full year yield (£ billion) at 1995–96 income levels restricted to: Full year yield (£ billion) at 1996–97 income levels restricted to:
Upper limit for total allowances and reliefs1 £ Marginal rates Basic rate 20 per cent. Marginal rate Basic rate 20 per cent.
10,000 0.5 2.8 7.8 0.5 3.1 7.1
15,000 0.3 2.6 7.7 0.3 3.0 7.0
20,000 0.2 2.6 7.7 0.2 2.9 7.0
No limit — 2.5 7.5 — 2.8 6.8
1 Available at marginal rates of tax.

Mr. Martyn Jones

To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for Peckham (Ms Harman) of 5 March 1993,Official Report, column 335, on the cumulative gain as a result of changes in income tax and national insurance since 1978–79 and 1987–88 to (a) 1995–96 and (b) 1996–97. [14402]

Mr. Jack

Readily available information on the annual reduction in income tax and national insurance liability for 1995–96 and 1996–97 compared with the 1978–79 and 1987–88 indexed regimes are given in the table. They are based on projections of the 1993–94 survey of personal incomes. These comparisons are hypothetical since if an indexed version of the 1978–79 and 1987–88 tax regime had prevailed the income base would not have grown in the way it has. The effect of changes in mortgage relief cannot be included in the analysis because most mortgage interest relief is given at source and therefore is not recorded on individual tax records.

providing calculations of the yield from restriction to the basic rate and 20p rate only for those reliefs and allowances claimed at the marginal rate; [14264]

(2) if he will update his answer to the hon. Member for Hartlepool of 1 July 1993, Official Report, column 598–600 on the introduction of an upper limit for income tax allowances and reliefs for the years 1995–96 and 1996–97 providing calculations of the yield from restriction to the basic rate only for those reliefs and allowances claimed at the marginal rate. [14267]

Mr. Jack

Available analyses of the full year yields at 1995–96 and 1996–97 income levels from introducing combinations of allowance and relief limits and restrictions are given in the table. The figures do not take account of any behavioural effects which might result from the introduction of such changes.

The estimated number of people with total allowances and reliefs in excess of these limits are as follows:

Limit Thousands
£ 1995–96 1996–97
10,000 170 190
15,000 60 70
20,000 30 40

Average reduction in income tax and national insurance per individual in 1995–96
£
Compared with 1978–79 indexed regime Compared with 1987–88 indexed regime
Range of individuals income in 1995–96 Income tax Income tax and national insurance Income tax Income tax and national insurance
Under 5,000 130 160 50 60
5,000–10,000 360 320 160 190
10,000–15,000 720 540 220 290
15,000–20,000 1,080 720 290 310
20,000–25,000 1,440 810 360 320
25,000–30,000 1,830 1,100 420 350
30,000–40,000 2,120 1,390 150 60
40,000–50,000 3,350 2,640 430 340
Average reduction in income tax and national insurance per individual in 1995–96
£
Compared with 1978–79 indexed regime Compared with 1987–88 indexed regime
Range of individuals income in 1995–96 Income tax Income tax and national insurance Income tax Income tax and national insurance
50,000–60,000 5,380 4,680 1,230 1,190
60,000–70,000 8,480 7,780 2,600 2,510
70,000–80,000 12,200 11,600 4,340 4,240
Over 80,000 47,900 47,200 19,900 19,800
Average 1,230 970 390 400
Average reduction in income tax and national insurance per individual in 1996–97
£
Compared with 1978–79 indexed regime Compared with 1987–88 indexed regime
Range of individuals income in 1996–97 Income tax Income tax and National Insurance Income tax Income tax and National Insurance
Under 5,000 150 200 60 80
5,000–10,000 390 380 200 250
10,000–15,000 810 670 330 420
15,000–20,000 1,240 920 450 500
20,000–25,000 1,640 1,090 560 550
25,000–30,000 2,070 1,390 690 610
30,000–40,000 2,490 1,830 530 450
40,000–50,000 3,560 2,930 700 630
50,000–60,000 5,490 4,900 1,490 1,420
60,000–70,000 8,320 7,760 2,690 2,640
70,000–80,000 11,800 11,200 4,340 4,270
Over 80,000 47,200 46,700 19,700 19,600
Average 1,410 1,170 540 550