§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer if he will estimate the combined net annual change in Exchequer revenues which would result from reducing the top rate of income tax from 40p to 30p and removing the ceiling on employees' national insurance contributions; and if he will make a statement. [110022]
§ Dawn PrimaroloThe estimated Exchequer cost of reducing the top rate of income tax from 40p to 30p and removing the ceiling on employees' national insurance contributions is around £3.7 billion in 2000–01.
§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer if he will make it his policy to more closely align the income tax and national insurance systems; and if he will make a statement. [110023]
§ Dawn PrimaroloBy bringing policy responsibility for tax and NICs together in the Inland Revenue, we have provided a single focus for employers' representatives to discuss improvements in legislation and processes across both income tax and national insurance contributions. From April 1999 we have aligned the point at which employers start to pay national insurance contributions with the income tax personal allowance. From April 2001, we will align fully the point at which employees start to pay National Insurance contributions with the income tax personal allowance. Provisions in the Child Support, Pensions and Social Security Bill currently before Parliament go a long way towards aligning, in the interests of fairness, the tax and NICs treatment of benefits in kind. The Chancellor announced in the Pre-Budget Report that the Inland Revenue will work with employers' representatives and others to reduce technical differences between tax and National Insurance, while having due regard to individuals' benefit entitlement.
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§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer how many people were paying income tax at the higher rate in(a) 1989–90, (b) 1996–97 and (c) 1999–2000; and if he will make a statement. [110025]
§ Dawn PrimaroloThe numbers of taxpayers paying some income tax at the higher rate were as follows:
million Year Numbers 1989–901 1.50 1996–97 2.08 1999–20002 2.40 1 Prior to 1990–91 most married couples were counted as one taxpayer 2 This estimate is based on the 1997–98 Survey of Personal incomes and consistent with the November 1999 Pre-Budget Report
§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer what estimate he has made of the total annual net cost of(a) raising the income threshold at which the upper rate of income tax is paid by £3,000 per annum and (b) aligning this threshold with the ceiling on making employee national insurance contributions; and if he will make a statement. [110059]
§ Dawn PrimaroloFor the year 2000–01 the estimated full year cost of raising the higher rate threshold by £3,000 is £1.3 billion and the estimated yield from aligning the threshold with the Upper Earnings Limit is £3 billion. These estimates are based on the 1997–98 Survey of Personal Incomes and are consistent with the November 1999 Pre-Budget Report.
§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer what is his estimate of the cost savings which would result if the national insurance system were abolished and integrated into the income tax system; and if he will make a statement. [110062]
§ Dawn PrimaroloIt is not possible to calculate the effects without more detail on how the integrated charge would work. In particular, income tax is charged on a wider base than national insurance contributions, covering in addition savings and investment income, pensions and contributory benefits. Income tax has no cap on employees' liability, no charge on the employer and no cessation of liability at retirement age, unlike National Insurance contributions, and payment of National Insurance contributions maintains access to contributory benefits.