HC Deb 23 February 1999 vol 326 cc243-4W
Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate the tax deducted from annual earnings in each £2,000 band between £10,000 and £30,000 by tax paying sub-contractors and individual craft workers in the construction industry. [69745]

Dawn Primarolo

The available data for 1997–98 are not yet of sufficient quality to yield estimates in such detail. The following estimates are for each £5,000 band of annual turnover.

Gross annual turnover of sole trade business Total amount deducted, 1997–98 (£ million)
£10,000 to 15,000 240
£15,001 to 20,000 240
£20,001 to 25,000 130
£25,001 to 30,000 60

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate the average annual expenses claimed against taxable gross earnings of £25,000 by tax paying sub-contractors and individual craft workers in the construction industry. [69746]

Dawn Primarolo

For the tax year 1996–97 the average value of annual allowable expenses (including materials) plus capital allowances claimed by a subcontractor with annual turnover of £25,000 was about £10,600.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will calculate(a) the tax deductible and (b) the tax payable for a sub-contracting carpenter/joiner with a turnover of £25,129, work expenses of £6,799 and personal pension payments of £3,470. [69747]

Dawn Primarolo

The maximum amount deductible on account of income tax and Class 4 national insurance contributions would be £5,780, depending on the amount of work outside the Construction Industry Scheme included in the turnover figure, and on the amount of expenses classified as materials for the purposes of the Scheme.

Assuming that only the single person's allowance is claimed and that tax relief is available on the whole of the personal pension contribution the liability to income tax and Class 4 national insurance contributions for the 1998–99 tax year would be £2,972.

If the deductions exceed the liability to income tax and Class 4 national insurance contribution then the individual can claim a repayment of the excess. If the business accounting period end date is early in the tax year, it should be possible to obtain some or all of this repayment within the tax year.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate the number of tax paying sub-contractors and individual craft workers earning less than £30,000 per annum to be included in the new tax system for the construction industry. [69744]

Dawn Primarolo

It is estimated that, very roughly, half a million individual subcontractors will be issued with registration cards (and paid with deductions on account of income tax and Class 4 national insurance contributions) under the new Construction Industry Scheme. This broadly equates to those remaining in the scheme and who have annual turnovers (less materials) of under £30,000.

A more exact assessment is not possible because of the large number of formerly self-employed subcontractors who have moved into employment, and because of uncertainty about how many other individuals will decide to apply for registration cards.