Tax (Hansard, 17 December 2001)

§ Matthew Taylor
To ask the Chancellor of the Exchequer what assessment he has made of the recommendation of the Tax Law Committee's memorandum relating to the tax law on transfer of assets between spouses following separation and divorce; and what estimate he has made of the cost of extending the time period by a further two years in which assets could be transferred between separated spouses without any gain or loss of treatment as advised by the Tax Law Committee; and if he will make a statement. [22465]

§ Dawn Primarolo
We have noted the recommendation by the Tax Law Committee.

§ Matthew Taylor
To ask the Chancellor of the Exchequer what assessment his Department has made of the extent to which the lower rate of income tax has achieved its objective of reducing in-work poverty; if he will place such studies in the Library; and if he will make a statement. [22468]

§ Dawn Primarolo
The introduction of the 10p rate of income tax in April 1999, together with its widening in April 2001, is worth between £100 and £188 a year to taxpayers, with the largest gains going to the low paid. Together with the cut in the basic rate of income tax and the reforms to national insurance contributions introduced during the last Parliament, the 10p rate is worth £330 a year to a single person working full-time on the minimum wage. This represents a 30 per cent. reduction in their combined income tax and national insurance bill, compared to the 1997 system.
The Government's approach to tackling poverty and making work pay has been set out in the series of reports: "The Modernisation of Britain's Tax and Benefit System" published alongside Budgets and pre-Budget reports over the last four years. All of these reports are available in the House of Commons Library.

§ Matthew Taylor
To ask the Chancellor of the Exchequer what estimate he has made of the change in tax liability for a median taxpayer if the lower rate and basic rate of tax were amalgamated at 22 per cent.; and what estimate he has made of the savings in compliance costs from such a change to the Inland Revenue and the taxpayer. [22463]

§ Dawn Primarolo
The estimates requested are not available.
30W

§ Matthew Taylor
To ask the Chancellor of the Exchequer what assessment he has made of the opinion of the Tax Law Committee on the impact of the number of tax rates; and if he will make a statement. [22464]

§ Dawn Primarolo
The Government keep the whole tax system under review, acting where possible to change tax rules to remove complexity in line with its objective of a modern and fair tax system.

§ Matthew Taylor
To ask the Chancellor of the Exchequer what assessment he has made of the opinion in the memorandum on tax reform by the Tax Law Committee on the taper relief system for capital gains tax and compliance costs; what estimates he has made of the costs of compliance for taper relief; and what estimate he had made of the proportion of taxpayers who benefit from the taper. [22466]

§ Dawn Primarolo
Taper relief is an intrinsically simple system: the taxpayer decides whether an asset has been a business asset or a non-business asset and then applies a percentage figure from a table to reduce the amount of gain charged to tax depending on how long the asset has been held.
Our proposal to reduce the length of the business assets taper to two years will ease that calculation in many cases, and we are currently considering suggestions for further amendments to the details of the taper relief rules which have been proposed in response to our consultation on simplifying Capital Gains Tax.
The Inland Revenue has a programme of compliance cost research and will study the taper system once it has had time to settle in and data become available. The Inland Revenue estimate that about 85 per cent. of those paying Capital Gains Tax in 2002–03 will benefit from taper relief.