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Taxation

House of Lords written question – answered on 21st May 2008.

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Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

asked Her Majesty's Government:

What percentage of an individual's annual income currently goes on direct taxes and national insurance, at earnings of (a) £10,000, (b) £20,000, (c) £30,000, (d) £40,000, (e) £50,000, (f) £60,000, (g) £70,000, (h) £80,000, (i) £90,000, (j) £100,000, (k) £150,000, (l) £200,000, and (m) £500,000.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

The information on liabilities is in the table. The figures assume no reliefs or deductions apply, and reflect the Statement by the Chancellor that the basic personal allowance for 2008-09 would be raised by £600 to £6,035, and the basic rate limit set at £34,800.

Earnings Income tax liability £ Primary class 1 NIC £ Total income tax and NICs £ Income tax and NICs as percentage of earnings
£10,000 793 499 1,292 12.9%
£20,000 2,793 1,599 4,392 22.0%
£30,000 4,793 2,699 7,492 25.0%
£40,000 6,793 3,799 10,592 26.5%
£50, 000 10,626 3,903 14,529 29.1%
£60,000 14,626 4,003 18,629 31.0%
£70,000 18,626 4,103 22,729 32.5%
£80,000 22,626 4,203 26,829 33.5%
£90,000 26,626 4,303 30,929 34.4%
£100,000 30,626 4,403 35,029 35.0%
£150,000 50,626 4,903 55,529 37.0%
£200,000 70,626 5,403 76,029 38.0%
£500,000 190,626 8,403 199,029 39.8%

Notes:

1. Assumes not contracted-out class 1 NIC rate applies, and that earnings are spread evenly throughout the year.

2. Figures have been rounded to the nearest £1.

3. Assumes only income is earnings and no income tax reliefs or deductions apply.

Information on the average rate of income tax liability for various ranges of total income is shown in table 3.5 on income and deductions based on the survey of personal incomes, of which 2005-06 is the latest year available. This table reflects the effect of deductions and reliefs as well as different tax rates on different types of income. The information can be found on the HM Revenue and Customs website at www.hmrc.gov.uk/stats/income_distribution/menu-by-year.htm.

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