Personal Income Tax Allowance

HC Deb 22 July 2004 vol 424 c484W

Mr. Willetts

To ask the Chancellor of the Exchequer if he will estimate(a) the gross cost and (b) the cost net of savings in social security benefits of raising the personal income tax allowance to £10,000 per annum. [185705]

Dawn Primarolo

The cost of raising the personal income tax allowances to –10,000 per annum in 2004–05 is(a) £29.8 billion in gross costs and (b) £29.6 billion in costs net of savings of social security benefits. The figures exclude any estimate of behavioural response to the tax change.

The gross costs are based on the Survey of Personal Incomes 2001–02 and are consistent with the Budget 2004. The savings from social security benefits are from the DWP Policy Simulation Model, based upon the Family Resources Survey 2002–03 and consistent with the Budget 2004.