§ Mr. TimmsTo ask the Chancellor of the Exchequer (1) what is the average marginal rate of tax used in calculating the cost of tax relief on profit-related pay; [28541]
(2) what is his most recent estimate of the cost of tax relief for profit-related pay for the tax year 1996–97. [28540]
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§ Mr. JackThe cost of income tax relief for profit-related pay schemes is approximately estimated on the assumption that the distribution of participants by marginal rate of tax is similar to that for employees generally. The average marginal rate of tax for employees in 1996–97 will be about 27 per cent.
Estimates of the cost of income tax relief for PRP tax relief for PRP schemes are published annually in table 1.6 of "Inland Revenue Statistics", copies of which are in the Library. An estimate of the cost in 1996–97 is not yet available.