HC Deb 07 May 1998 vol 311 c453W
Mr. Malcolm Bruce

To ask the Chancellor of the Exchequer if he will estimate the net cost to the Exchequer in 1999–2000 of(a) increasing the personal income tax allowance to £10,000 per annum, (b) abolishing the 20 per cent. tax band, (c) abolishing the capital gains tax exempt amounts, (d) abolishing the age-related personal allowances, (e) abolishing the married couple's tax allowance, (f) abolishing mortgage interest tax relief, (g) starting the higher rate band of income tax at taxable incomes of over £22,000 per annum and (h) ending the zero-rating of international passenger transport. [40378]

Dawn Primarolo

[holding answer 5 May 19981]: The latest figures available are for 1998–99 which are shown in the table.

Exchequer effect—£billion yield(+)/cost(-) 1998–99 (full year)
(a) Increasing the personal income tax allowance to £10,000 per annum -29.0
(b) Abolishing the 20 per cent. tax band +3.0
(c) Cost of the capital gains tax exempt amounts -1.5
(d) Abolishing the age related personal allowances +0.8
(e) Abolishing the married couple's tax allowance +3.4
(f) Abolishing mortgage interest tax relief +1.9
(g) Starting the higher rate band of income tax at taxable incomes of over £22,000 per annum +2.6
(h) Ending the zero-rating of international passenger transport +1.3

Notes:

  1. (a) Includes aged personal allowances
  2. (b) Assumes the rate of tax on income from savings remains unchanged
  3. (c) This figure seeks to allow for windfall gains arising from building society and insurance company de-mutualisations, but is particularly tentative due to the uncertain level of de-mutualisation activity during this year and has been rounded to the nearest £½ billion. This estimate represents the reduction in tax liabilities from the existence of the relief and cannot generally be interpreted as the yield from withdrawing it. In practice, withdrawing a relief would often result in significant changes to taxpayers' behaviour and might require changes to other reliefs
  4. (d) Includes abolishing age-related personal allowances but not the age-related married couple's allowance
  5. (e) Includes abolishing both the non-aged and aged married couple's allowances, additional personal allowance and widow's bereavement allowance
  6. (f) Assumes an average building society interest rate of 7.75 per cent. and includes a reduction in public spending