Income Tax

Treasury written question – answered at on 25 June 2007.

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Photo of Vincent Cable Vincent Cable Shadow Chancellor of the Exchequer, Liberal Democrat Spokesperson (Treasury)

To ask the Chancellor of the Exchequer

(1) if he will estimate the number of people who will be subject to a higher marginal rate of taxation as a result of Budget 2007 in each year from 2007-08 to 2009-10; and if he will make a statement;

(2) if he will estimate the number of people who will pay more income tax as a result of Budget 2007 in each year from 2007-08 to 2009-10; and if he will make a statement.

Photo of Frank Field Frank Field Labour, Birkenhead

To ask the Chancellor of the Exchequer

(1) what estimate he has made of the number of people (a) whose income will be reduced by the abolition of the 10p income tax rate, broken down by gender, and (b) whose loss of income caused by the abolition of the 10p income tax rate will be made up by tax credits;

(2) how many taxpayers will see their tax bill increase as a result of the proposed abolition of the 10p starting rate; and how many of this group will have the tax increase covered (a) completely and (b) in part by increased eligibility for tax credits.

Photo of Madeleine Moon Madeleine Moon Labour, Bridgend

To ask the Chancellor of the Exchequer what estimate he has made of the effect of the abolition of the 10p tax band on an individual earning £10,000 per annum who is (a) in receipt of tax credits and (b) not in receipt of tax credits.

Photo of Edward Balls Edward Balls The Economic Secretary to the Treasury

In 2008-09, all 31 million taxpayers would have benefited from the 10p rate of income tax. Some 28 million of these taxpayers stand to gain from the cut in the basic rate of income tax to 20p.

As a result of the personal tax package changes in Budget 2007 as a whole, four in five households will be better off or see no change in household income. This means 21 million households will see their net tax payments fall or stay the same.

The final impact on individual families' living standards will depend upon final levels of wages, the national minimum wage, indexation and levels of benefits such as the child tax credit and the pension credit.

Does this answer the above question?

Yes1 person thinks so

No3 people think not

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