§ Mr. BercowTo ask the Chancellor of the Exchequer what percentage of gross earnings was accounted for by(a) income tax, (b) national insurance contributions, (c) VAT, (d) other indirect taxes and (e) local taxes for (i) a single person, (ii) a married couple who are both working and (iii) a married couple with two children on (A) 50 per cent., (B) 75 per cent., (C) 100 per cent., (D) 150 per cent., (E) 200 per cent., (F) 500 per cent. and (G) 1,000 per cent. of average earnings in each year since 1997. [25296]
§ Mr. Andrew SmithThe available information, which shows income tax (including child benefit and working families tax credit from its first full year of implementation) and national insurance contributions for multiples of median earnings up to 200 per cent. was published in answer to a question from the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) on 30 March 2001, Official Report, columns 843–44W. The same information for 500 per cent. and 1,000 per cent. of median earnings is given in the table. The estimates of median earnings used here are the same as those in the earlier answer, £19,600 per annum in 2001–02
Estimating the impact of indirect taxes on these very specific family types is meaningless because spending patterns vary considerably between households of the same type and income. The level of council tax payments also varies depending on where families live.
967W
Multiples of median earnings 500 per cent. 1,000 per cent. Single 1997–98 £ per week Gross income 1,603.65 3,207.30 Income Tax 522.65 1,164.11 NICs 41.54 41.54 Percentage of gross earnings Income Tax 32.6 36.3 NICs 2.6 1.3 Tax and NICs 35.2 37.6 968W
Multiples of median earnings 500 per cent. 1,000 per cent. 1998–99 £ per week Gross income 1,663.50 3,327.00 Income Tax 542.05 1,207.45 NICs 43.38 43.38 Percentage of gross earnings Income Tax 32.6 36.3 NICs 2.6 1.3 Tax and NICs 35.2 37.6 1999–2000 £ per week Gross income 1,722.25 3,444.50 Income Tax 560.27 1,249.17 NICs 43.40 43.40 Percentage of gross earnings Income Tax 32.5 36.3 NICs 2.5 1.3 Tax and NICs 35.1 37.5 2000–01 £ per week Gross income 1,799.75 3,599.50 Income Tax 584.35 1,304.25 NICs 45.90 45.90 Percentage of gross earnings Income Tax 32.5 36.2 NICs 2.6 1.3 Tax and NICs 35.0 37.5 2001–02 £ per week Gross income 1,880.74 3,761.48 Income Tax 611.30 1,363.60 NICs 48.80 48.80 Percentage of gross earnings Income Tax 32.5 36.3 NICs 2.6 1.3 Tax and NICs 35.1 37.5 Two-earner married couple, no children 1997–98 £ per week Gross income 1,603.65 3,207.30 Income Tax 398.57 1,040.03 NICs 83.08 >83.08 Percentage of gross earnings Income Tax 24.9 32.4 NICs 5.2 2.6 Tax and NICs 30.0 35.0 1998–99 £ per week Gross income 1,663.50 3,327.00 Income Tax 413.23 1,078.63 NICs 86.76 86.76 Percentage of gross earnings Income Tax 24.8 32.4 NICs 5.2 2.6 Tax and NICs 30.1 35.0 1999–2000 £ per week Gross income 1,722.25 3,444.50 Income Tax 427.84 1,116.74 NICs 86.80 86.80 Percentage of gross earnings Income Tax 24.8 32.4 NICs 5.0 2.5 Tax and NICs 29.9 34.9 2000–01 £ per week Gross income 1,799.75 3,599.50 969W
Multiples of median earnings 500 per cent. 1,000 per cent. Income Tax 448.81 1,168.71 NICs 91.80 91.80 Percentage of gross earnings Income Tax 24.9 32.5 NICs 5.1 2.6 Tax and NICs 30.0 35.0 2001–02 £ per week Gross income 1,880.74 3,761.48 Income Tax 470.31 1,222.61 NICs 97.60 97.60 Percentage of gross earnings Income Tax 25.0 32.5 NICs 5.2 2.6 Tax and NICs 30.2 35.1 Single-earner married couple, two children 1997–98 £ per week Gross income 1,603.65 3,207.30 Income Tax 517.37 1,158.83 NICs 41.54 41.54 Child Benefit (CB) 20.05 20.05 Percentage of gross earnings Income Tax 32.3 36.1 NICs 2.6 1.3 Income Tax 33.6 36.8 1998–99 £ per week Gross income 1,663.50 3,327.00 Income Tax 536.57 1,201.97 NICs 43.38 43.38 Child Benefit (CB) 20.75 20.75 Percentage of gross earnings Income Tax 32.3 36.1 NICs 2.6 1.3 Income Tax 33.6 36.8 1999–2000 £ per week Gross income 1,722.25 3,444.50 Income Tax 556.48 1,245.38 NICs 43.40 43.40 Child Benefit (CB) 24.00 24.00 Percentage of gross earnings Income Tax 32.3 36.2 NICs 2.5 1.3 Income Tax 33.4 36.7 2000–01 £ per week Gross income 1,799.75 3,599.50 Income Tax 584.35 1,304.25 NICs 45.90 45.90 Child Benefit (CB) 25.00 25.00 Percentage of gross earnings Income Tax 32.5 36.2 NICs 2.6 1.3 Income Tax 33.6 36.8 2001–02 £ per week Gross income 1,880.74 3,761.48 Income Tax 611.30 1,363.60 NICs 48.80 48.80 Child Benefit (CB) 25.85 25.85 Percentage of gross earnings Income Tax 32.5 36.3 NICs 2.6 1.3 Income Tax 33.7 36.9 Notes:
1. Income tax payments are calculated on the basis that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners are assumed to pay Class 1 national insurance contributions at the contracted-in rate.
2. Earnings are taken to be the median gross weekly earnings of all full-time employees on adult rates with pay unaffected by absence. (Median earnings are more representative of the population as whole than mean male full-time earnings).
3. In line with the convention in the Tax Benefit Reference Manual, Child Benefit is treated as negative income tax.
4. For the two earner family it is assumed that earnings are split 60 per cent.: 40 per cent.