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11 Dec 1996 : Column: 189

Written Answers to Questions

Wednesday 11 December 1996

TREASURY

Computers

Mr. David Atkinson: To ask the Chancellor of the Exchequer what steps the Bank of England is taking to ensure the single currency compliancy of its computer systems, and those with which they are connected; what is its budget for this purpose; and if he will make a statement. [6661]

Mrs. Angela Knight: The Bank of England's computer systems will be affected by the introduction of the euro whether or not the United Kingdom adopts the single currency. Work to assess the implications and to ensure preparedness started some time ago. The bank is also liaising with the Association for Payment Clearing Services, which oversees the banking payments systems, and with the commercial banks. No separate budget has yet been set for this process.

Tax Law Rewrite

Mr. Forman: To ask the Chancellor of the Exchequer when the Inland Revenue will publish the document giving the plans and arrangements for the tax law rewrite, referred to in his 1996 Budget statement. [8931]

Mr. Jack: I am very pleased to be able to report on the good progress that has been made on the tax law rewrite. The Inland Revenue has today published a document which sets out the response to its consultations on this project to rewrite tax law in clearer and simpler language. I am placing copies in the Libraries of the House.

This document takes full account of the comments received. It sets out the resulting plans and arrangements for taking the rewrite forward, so that the first rewrite Bill will be ready for enactment in the 1997-98 parliamentary Session.

This is a very important and worthwhile project which will bring the benefits of clarity and certainty to businesses and ordinary taxpayers alike. We are committed to proceeding with it on the basis of full consultation.

Mr. Forman: To ask the Chancellor of the Exchequer who will be the members of the tax law rewrite steering committee being chaired by the right hon. the Lord Howe of Aberavon CH, QC. [8932]

Mr. Jack: The steering committee will play a crucial role in the rewrite project. Under the chairmanship of the right hon. the Lord Howe of Aberavon CH, QC, the committee will guide the project through the challenges that lie ahead, while ensuring that it keeps to its objectives.

11 Dec 1996 : Column: 190

The committee combines the talents and experience of a wide range of members drawn from Parliament, the legal and accountancy professions, consumer interests and the private sector.

I am delighted to announce today that the other members of the committee will be the right hon. Sir John Balcombe, Mr. Ian Barlow, Dr. John Avery Jones CBE, Mr. Steve Matheson CB, Dr. John Marek MP, Ms Sheila McKechnie OBE, Sir John Shaw and Mr. Tim Smith MP. I am sure that this important project will benefit greatly from their experience.

Taxation

Mr. Darling: To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for Oxford, East (Mr. Smith) of 26 February, Official Report, columns 339-52, to take account of (a) changes made in the Budget, and to provide his latest estimates of the burden of direct and indirect taxes for 1997-98, (b) revisions to figures for earlier years and (c) separate figures for (i) VAT, (ii) other indirect taxes and (iii) the council tax. [5195]

Mr. Jack [holding answer 27 November 1996]: The tables show estimates of tax payments for the requested specimen households for the years 1994-95 to 1997-98.

The main factors accounting for the increase in payments between years are growth in earnings and inflation. The figures for tax payments do not measure the effects of changes in tax rates, allowances, etcetera. A one-earner couple on average earnings with two children will pay £88 less in income tax and national insurance contributions next year than if these taxes had been left unchanged since 1991-92, apart from indexation.

Real take-home pay for all these households will rise next year and will be substantially higher than in 1991-92. For the family on average earnings, the increase next year will be £370, bringing the total rise since 1991-92 to over £1,100. These increases take account of all taxes as well as earnings growth and inflation. Other factors are also boosting living standards, such as the lowest mortgage rates for 30 years and the rise in employment by ¾ million since 1992.

The figures for tax payments are subject to important limitations. The estimates of indirect tax payments are very approximate. They are based on the assumption that these taxes are fully passed on in prices, which may not hold in practice. They also assume particular spending patterns by the households whereas in practice there are wide variations in spending on taxed goods, and hence in indirect tax payments, between households with similar incomes and compositions. Nor do the estimates include the effects of changes in tax on savings, particularly the reduction in the tax rate on savings income to 20 per cent. for basic rate payers or the growth in tax-free tax-exempt special savings accounts and personal equity plans, as the households specified have income only from earnings. The overall tax burden--total taxes and national insurance contributions as a percent of GDP--which includes the impact of all taxes is expected to be at the same level next year as in 1991-92.

Income tax, national insurance and indirect taxes at multiples of average earnings 1994-95Percentage of male average earnings

	50	75	100	150	200	300	400	500	700	1,000	2,000
Single person
£ per week
Gross income	184.55	276.83	369.10	553.65	738.20	1,107.30	1,476.40	1,845.50	2,583.70	3,691.00	7,382.00
NICs	13.90	23.12	32.35	38.44	38.44	38.44	38.44	38.44	38.44	38.44	38.44
Income tax	26.69	49.76	72.83	123.71	197.53	345.17	492.81	640.45	935.73	1,378.65	2,855.05
VAT		14.84	19.78	30.29
Other indirect taxes		20.05	25.53	37.19
Total excluding council tax		107.78	150.49	229.63
Council tax		7.10	7.34	7.87
Real take-home pay (1996-97 prices)	151.79	215.02	278.26	412.77	529.52	763.01	996.50	1,230.00	1,696.98	2,397.46	4,732.38
Percentage of earnings
NICs	7.5	8.4	8.8	6.9	5.2	3.5	2.6	2.1	1.5	1.0	0.5
Income tax	14.5	18.0	19.7	22.3	26.8	31.2	33.4	34.7	36.2	37.4	38.7
VAT		5.4	5.4	5.5
Other indirect taxes		7.2	6.9	6.7
Total excluding council tax		38.9	40.8	41.5
Council tax		2.6	2.0	1.4
Married couple, one earner: no children
£ per week
Gross income	184.55	276.83	369.10	553.65	738.20	1,107.30	1,476.40	1,845.50	2,583.70	3,691.00	7,382.00
NICs	13.90	23.12	32.35	38.44	38.44	38.44	38.44	38.44	38.44	38.44	38.44
Income tax	20.08	43.14	66.21	117.09	190.91	338.55	486.19	633.83	929.11	1,372.03	2,848.43
VAT		15.34	20.84	32.54
Other indirect taxes		21.47	25.61	34.43
Total excluding council tax		103.08	145.01	222.50
Council tax		9.36	10.06	11.54
Real take-home pay (1996-97 prices)	158.76	222.00	285.24	419.75	536.49	769.98	1,003.48	1,236.97	1,703.96	2,404.43	4,739.36
Percentage of earnings
NICs	7.5	8.4	8.8	6.9	5.2	3.5	2.6	2.1	1.5	1.0	0.5
Income tax	10.9	15.6	17.9	21.1	25.9	30.6	32.9	34.3	36.0	37.2	38.6
VAT		5.5	5.6	5.9
Other indirect taxes		7.8	6.9	6.2
Total excluding council tax		37.2	39.3	40.2
Council tax		3.4	2.7	2.1
Married couple, one earner: 2 children
£ per week
Gross income	184.55	276.83	369.10	553.65	738.20	1,107.30	1,476.40	1,845.50	2,583.70	3,691.00	7,382.00
NICs	13.90	23.12	32.35	38.44	38.44	38.44	38.44	38.44	38.44	38.44	38.44
Income tax (less child benefit)	1.63	24.69	47.76	98.64	172.46	320.10	467.74	615.38	910.66	1,353.58	2,829.98
VAT		15.33	20.30	30.88
Other indirect taxes		24.99	28.01	34.43
Total excluding council tax		88.13	128.42	202.40
Council tax		8.72	9.21	10.27
Real take-home pay (1996-97 prices)	178.21	241.45	304.69	439.20	555.94	789.44	1,022.93	1,256.42	1,723.41	2,423.89	4,758.81
Percentage of earnings
NICs	7.5	8.4	8.8	6.9	5.2	3.5	2.6	2.1	1.5	1.0	0.5
Income tax (less child benefit)	0.9	8.9	12.9	17.8	23.4	28.9	31.7	33.3	35.2	36.7	38.3
VAT		5.5	5.5	5.6
Other indirect taxes		9.0	7.6	6.2
Total excluding council tax		31.8	34.8	36.6
Council tax		3.1	2.5	1.9
Married couple, 2 earners: no children: Earnings split 60:40
£ per week
Gross income	184.55	276.83	369.10	553.65	738.20	1,107.30	1,476.40	1,845.50	2,583.70	3,691.00	7,382.00
NICs	9.34	18.56	27.79	46.25	63.41	76.88	76.88	76.88	76.88	76.88	76.88
Income tax	3.79	24.36	46.77	92.90	139.04	252.67	388.44	536.08	831.36	1274.28	2750.68
VAT		16.67	22.14	32.98
Other indirect taxes		24.78	29.92	40.08
Total excluding council tax		84.37	126.62	212.20
Council tax		9.55	9.74	10.12
Real take-home pay (1996-97 prices)	180.73	246.61	310.55	437.02	564.86	820.01	1,066.01	1,299.50	1,766.49	2,466.97	4,801.89
Percentage of earnings
NICs	5.1	6.7	7.5	8.4	8.6	6.9	5.2	4.2	3.0	2.1	1.0
Income tax	2.1	8.8	12.7	16.8	18.8	22.8	26.3	29.0	32.2	34.5	37.3
VAT		6.0	6.0	6.0
Other indirect taxes		9.0	8.1	7.2
Total excluding council tax		30.5	34.3	38.3
Council tax		3.5	2.6	1.8

11 Dec 1996 : Column: 193

Income tax, national insurance and indirect taxes at multiples of average earnings 1995-96Percentage of male average earnings

	50	75	100	150	200	300	400	500	700	1000	2000
Single person
£ per week
Gross income	190.60	285.90	381.20	571.80	762.40	1,143.60	1,524.80	1,906.00	2,668.40	3,812.00	7,624.00
NICs	14.42	23.95	33.48	39.36	39.36	39.36	39.36	39.36	39.36	39.36	39.36
Income tax	27.63	51.45	75.28	128.43	204.67	357.15	509.63	662.11	967.07	1,424.51	2,949.31
VAT		15.06	20.08	30.75
Other indirect taxes		21.75	27.66	40.21
Total excluding council tax		112.20	156.49	238.76
Council tax		7.51	7.77	8.32
Real take-home pay (1996-97 prices)	151.72	214.99	278.25	412.62	529.42	763.02	996.61	1,230.21	1,697.40	2,398.19	4,734.15
Percentage of earnings
NICs	7.6	8.4	8.8	6.9	5.2	3.4	2.6	2.1	1.5	1.0	0.5
Income tax	14.5	18.0	19.7	22.5	26.8	31.2	33.4	34.7	36.2	37.4	38.7
VAT		5.3	5.3	5.4
Other indirect taxes		7.6	7.3	7.0
Total excluding council taxes		39.2	41.1	41.8
Council tax		2.6	2.0	1.5
Married couple, one earner: no children
£ per week
Gross income	190.60	285.90	381.20	571.80	762.40	1,143.60	1,524.80	1,906.00	2,668.40	3,812.00	7,624.00
NICs	14.42	23.95	33.48	39.36	39.36	39.36	39.36	39.36	39.36	39.36	39.36
Income tax	22.66	46.49	70.31	123.47	199.71	352.19	504.67	657.15	962.11	1,419.55	2,944.35
VAT		15.37	20.96	32.83
Other indirect taxes		23.45	27.87	37.27
Total excluding council tax		109.26	152.63	232.93
Council tax		9.87	10.60	12.15
Real take-home pay (1996-97 prices)	156.79	220.05	283.32	417.69	534.49	768.08	1001.68	1235.28	1702.47	2403.26	4739.22
Percentage of earnings
NICs	7.6	8.4	8.8	6.9	5.2	3.4	2.6	2.1	1.5	1.0	0.5
Income tax	11.9	16.3	18.4	21.6	26.2	30.8	33.1	34.5	36.1	37.2	38.6
VAT		5.4	5.5	5.7
Other indirect taxes		8.2	7.3	6.5
Total excluding council tax		38.2	40.0	40.7
Council tax		3.5	2.8	2.1
Married couple, one earner: 2 children
£ per week
Gross income	190.60	285.90	381.20	571.80	762.40	1,143.60	1,524.80	1,906.00	2,668.40	3,812.00	7,624.00
NICs	14.42	23.95	33.48	39.36	39.36	39.36	39.36	39.36	39.36	39.36	39.36
Income tax (less child benefit)	3.81	27.64	51.46	104.62	180.86	333.34	485.82	638.30	943.26	1,400.70	2,925.50
VAT		15.36	20.42	31.16
Other indirect taxes		27.34	30.60	37.51
Total excluding council tax		94.29	135.96	212.64
Council tax		9.20	9.72	10.82
Real take-home pay (1996-97 prices)	176.04	239.31	302.57	436.94	553.74	787.33	1,020.93	1,254.53	1,721.72	2,422.51	4,758.47
Percentage of earnings
NICs	7.6	8.4	8.8	6.9	5.2	3.4	2.6	2.1	1.5	1.0	0.5
Income tax (less child benefit)	2.0	9.7	13.5	18.3	23.7	29.1	31.9	33.5	35.3	36.7	38.4
VAT		5.4	5.4	5.4
Other indirect taxes		9.6	8.0	6.6
Total excluding council tax		33.0	35.7	37.2
Council tax		3.2	2.5	1.9
Married couple, 2 earners, no children: Earnings split 60:40
£ per week
Gross income	190.60	285.90	381.20	571.80	762.40	1,143.60	1,524.80	1,906.00	2,668.40	3,812.00	7,624.00
NICs	9.78	19.31	28.84	47.90	65.22	78.72	78.72	78.72	78.72	78.72	78.72
Income tax	6.04	27.21	50.29	97.94	145.59	263.55	404.38	556.86	861.82	1,319.26	2,844.06
VAT		16.69	22.27	33.28
Other indirect taxes		26.94	32.64	43.93
Total excluding council tax		90.15	134.04	223.05
Council tax		10.11	10.31	10.71
Real take-home pay (1996-97 prices)	178.50	244.48	308.51	435.04	563.35	818.41	1063.91	1297.50	1764.69	2465.48	4801.44
Percentage of earnings
NICs	5.1	6.8	7.6	8.4	8.6	6.9	5.2	4.1	3.0	2.1	1.0
Income tax	3.2	9.5	13.2	17.1	19.1	23.0	26.5	29.2	32.3	34.6	37.3
VAT		5.8	5.8	5.8
Other indirect taxes		9.4	8.6	7.7
Total excluding council tax		31.5	35.2	39.0
Council tax		3.5	2.7	1.9

11 Dec 1996 : Column: 193

Income tax, national insurance and indirect taxes at multiples of average earnings 1996-97Percentage of male average earnings

	50	75	100	150	200	300	400	500	700	1000	2000
Single person
£ per week
Gross income	197.75	296.63	395.50	593.25	791.00	1,186.50	1,582.00	1,977.50	2,768.50	3,955.00	7,910.00
NICs	14.90	24.78	34.67	40.62	40.62	40.62	40.62	40.62	40.62	40.62	40.62
Income tax	27.08	50.81	74.54	126.88	205.98	364.18	522.38	680.58	996.98	1,471.58	3,053.58
VAT		16.41	21.91	33.66
Other indirect taxes		23.27	29.63	43.23
Total excluding council tax		115.27	160.75	244.38
Council tax		7.74	8.01	8.57
Real take-home pay Percentage of male average earnings (1996-97 prices)	155.77	221.03	286.29	425.75	544.40	781.70	1,019.00	1,256.30	1,730.90	2,442.80	4,815.80
Percentage of earnings
NICs	7.5	8.4	8.8	6.8	5.1	3.4	2.6	2.1	1.5	1.0	0.5
Income tax	13.7	17.1	18.8	21.4	26.0	30.7	33.0	34.4	36.0	37.2	38.6
VAT		5.5	5.5	5.7
Other indirect taxes		7.8	7.5	7.3
Total excluding council tax		38.9	40.6	41.2
Council tax		2.6	2.0	1.4
Married couple, one earner: no children
£ per week
Gross income	197.75	296.63	395.50	593.25	791.00	1,186.50	1,582.00	1,977.50	2,768.50	3,955.00	7,910.00
NICs	19.90	24.78	34.67	40.62	40.62	40.62	40.62	40.62	40.62	40.62	40.62
Income tax	21.92	45.65	69.38	121.71	200.81	359.01	517.21	675.41	991.81	1,466.41	3,048.41
VAT		16.72	22.84	35.92
Other indirect taxes		25.07	29.78	39.85
Total excluding council tax		112.22	156.67	238.10
Council tax		10.15	10.90	12.51
Real take-home pay (1996-97 prices)	160.94	226.19	291.45	430.92	549.57	786.87	1,024.87	1,261.47	1,736.07	2,447.97	4,820.97
Percentage of earnings
NICs	7.5	8.4	8.8	6.8	5.1	3.4	2.6	2.1	1.5	1.0	0.5
Income tax	11.1	15.4	17.5	20.5	25.4	30.3	32.7	34.2	35.8	37.1	38.5
VAT		5.6	5.8	6.1
Other indirect taxes		8.5	7.5	6.7
Total excluding council tax		37.8	39.6	40.1
Council tax		3.4	2.8	2.1
Married couple, one earner: 2 children
£ per week
Gross income	197.75	296.63	395.50	593.25	791.00	1,186.50	1,582.00	1,977.50	2,768.50	3,955.00	7,910.00
NICs	14.90	24.78	34.67	40.62	40.62	40.62	40.62	40.62	40.62	40.62	40.62
Income tax (less child benefit)	2.32	26.05	49.78	102.11	181.21	339.41	497.61	655.81	972.21	1,446.81	3,028.81
VAT		16.70	22.23	34.07
Other indirect taxes		29.53	33.00	40.42
Total excluding council tax		97.06	139.68	217.22
Council tax		9.47	10.00	11.14
Real take-home pay (1996-97 prices)	180.54	245.79	311.05	450.52	569.17	806.47	1,043.77	1,281.07	1,755.67	2,467.57	4,840.57
Percentage of earnings
NICs	7.5	8.4	8.8	6.8	5.1	3.4	2.6	2.1	1.5	1.0	0.5
Income tax (less child benefit)	1.2	8.8	12.6	17.2	22.9	28.6	31.5	33.2	35.1	36.6	38.3
VAT		5.6	5.6	5.7
Other indirect taxes		10.0	8.3	6.8
Total excluding council tax		32.7	35.3	36.6
Council tax		32.2	2.5	1.9
Married couple, 2 earners, no children: Earnings split 60:40
£ per week
Gross income	197.75	296.63	395.50	593.25	791.00	1,186.50	1,582.00	1,977.50	2,768.50	3,955.00	7.910.00
NICs	10.02	19.90	29.79	49.57	67.38	81.24	81.24	81.24	81.24	81.24	81.24
Income tax	5.42	26.42	49.00	96.46	143.92	262.70	406.79	564.99	881.39	1,355.99	2,937.99
VAT		18.07	24.20	36.26
Other indirect taxes		28.94	34.98	46.86
Total excluding council tax		93.34	137.98	229.15
Council tax		10.42	10.63	11.03
Real take-home pay (1996-96 prices)	182.31	250.30	317.71	447.22	579.70	842.56	1,093.97	1,331.27	1,805.87	2,517.77	4,890.77
Percentage of earnings
NICs	5.1	6.7	7.5	8.4	8.5	6.8	5.1	4.1	2.9	2.1	1.0
Income tax	2.7	8.9	12.4	16.3	18.2	22.1	25.7	28.6	31.8	34.3	37.1
VAT		6.1	6.1	6.1
Other indirect taxes		9.8	8.8	7.9
Total excluding council tax		31.5	34.9	38.6
Council tax		3.5	2.7	1.9

11 Dec 1996 : Column: 197

Income tax, national insurance and indirect taxes at multiples of average earnings 1997-98Percentage of male average earnings

	50	75	100	150	200	300	400	500	700	1,000	2,000
Single person
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1,233.90	1,645.20	2,056.50	2,879.10	4,113.00	8,226.00
NICs	15.61	25.89	36.17	41.54	41.54	41.54	41.54	41.54	41.54	41.54	41.54
Income tax	27.04	50.69	74.34	127.97	210.23	374.75	539.27	703.49	1,032.83	1,526.39	3,171.59
VAT		17.19	23.01	35.39
Other indirect taxes		25.09	32.07	46.93
Total excluding council tax		118.86	165.59	251.83
Real take-home pay (1996-97 prices)	156.06	226.29	293.51	436.61	557.02	797.83	1,038.64	1,279.45	1,761.07	2,483.51	4,891.61
Increase since 1991-92	13.66	19.25	24.84	34.13	38.04	54.73	71.42	88.11	121.49	171.56	338.46
Increase since 1996-97	3.29	5.26	7.22	10.86	12.62	16.13	19.64	23.15	30.17	40.71	75.81
Percentage of earnings
NICs	7.6	8.4	8.8	6.7	5.0	3.4	2.5	2.0	1.4	1.0	0.5
Income tax	13.1	16.4	18.1	20.7	25.6	30.4	32.8	34.2	35.9	37.1	38.6
VAT		5.6	5.6	5.7
Other indirect taxes		8.1	7.8	7.6
Total excluding council tax		38.5	40.3	40.8
Married couple, one earner: no children
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1,233.90	1,645.20	2,056.50	2,879.00	4,113.00	8,226.00
NICs	15.61	25.89	36.17	41.54	41.54	41.54	41.54	41.54	41.54	41.54	41.54
Income tax	21.76	45.41	69.06	122.69	204.95	369.47	533.99	698.51	1,027.55	1,521.11	3,166.31
VAT		17.47	23.94	37.71
Other indirect taxes		27.10	32.20	43.06
Total excluding council tax		115.87	161.37	245.01
Real take-home pay (1996-97 prices)	164.21	231.44	298.66	441.77	562.17	802.98	1,043.79	1,284.60	1,766.23	2,488.66	4,896.77
Increase since 1991-92	9.41	15.01	20.59	29.90	28.15	44.84	61.53	78.22	111.61	161.68	328.59
Increase since 1996-97	3.27	5.25	7.21	10.85	12.60	16.11	19.62	23.13	30.16	40.69	75.80
Percentage of earnings
NICs	7.6	8.4	8.8	6.7	5.0	3.4	2.5	2.0	1.4	1.0	0.5
Income tax	10.6	14.7	16.8	19.9	24.9	29.9	32.5	34.0	35.7	37.0	38.5
VAT		5.7	5.8	6.1
Other indirect taxes		8.8	7.8	7.0
Total excluding council tax		37.6	39.2	39.7
Married couple one earner: 2 children
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1,233.90	1,645.20	2,056.50	2,879.10	4,113.00	8,226.00
NICs	15.61	25.89	36.17	41.54	41.54	41.54	41.54	41.54	41.54	41.54	41.54
Income tax (less child benefit)	1.71	25.36	49.01	102.64	184.90	349.42	513.94	678.46	1,007.50	1,501.06	3,146.26
VAT		17.41	23.26	35.72
Other indirect taxes		31.92	35.73	43.84
Total excluding council tax		100.58	144.17	223.75
Real take-home pay (1996-97 prices)	183.78	251.00	318.23	461.33	581.74	822.55	1,063.36	1,304.17	1,785.79	2,508.22	4,916.33
Increase since 1991-92	10.65	16.24	21.83	31.13	29.40	46.09	62.78	79.47	112.85	162.91	329,82
Increase since 1996-97	3.24	5.21	7.18	10.81	12.57	16.08	19.59	23.10	30.12	40.65	75.76
Percentage of earnings
NICs	7.6	8.4	8.8	6.7	5.0	3.4	2.5	2.0	1.4	1.0	0.5
Income tax (less child benefit)	0.8	8.2	11.9	16.6	22.5	28.3	31.2	33.0	35.0	36.5	38.2
VAT		5.6	5.7	5.8
Other indirect taxes		10.3	8.7	7.1
Total excluding council tax		32.6	35.1	36.3
Married couple, 2 earners, no children: Earnings split 60:-40
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1,233.90	1,645.20	2,056.50	2,879.10	4,113.00	8,226.00
NICs	10.65	20.93	31.21	51.78	69.48	83.08	83.08	83.08	83.08	83.08	83.08
Income tax	4.74	26.15	48.81	96.11	143.41	265.31	415.19	579.71	908.75	1,402.31	3,047.51
VAT		18.78	25.24	37.99
Other indirect taxes		31.06	37.64	50.62
Total excluding council tax		96.92	142.90	236.49
Real take-home pay (1996-97 prices)	185.67	255.07	323.27	457.72	594.96	864.09	1,119.19	1,360.00	1,841.62	2,564.06	4,972.16
Increase since 1991-92	8.73	16.50	23.06	34.25	47.77	56.46	66.19	82.88	116.26	166.34	333.23
Increase since 1996-97	3.36	4.77	6.56	10.50	15.26	21.53	25.22	28.73	35.75	46.29	81.39
Percentage of earnings
NICs	5.2	6.8	7.6	8.4	8.4	6.7	5.0	4.0	2.9	2.0	1.0
Income tax	2.3	8.5	11.9	15.6	17.4	21.5	25.2	28.2	31.6	34.1	37.0
VAT		6.1	6.1	6.2
Other indirect taxes		10.1	9.2	8.2
Total excluding council tax		31.4	34.7	38.3

11 Dec 1996 : Column: 199

Income tax, national insurance and indirect taxes at multiples of average earnings1991-92 indexed to 1997-98

	Percentage of male average earnings
	50	75	100	150	200	300	400	500	700	100	2000
Single person
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1233.90	1645.20	2056.50	2879.10	4113.00	8226.00
NICs	14.17	23.42	32.68	37.51	37.51	37.51	37.51	37.51	37.51	37.51	37.51
Income tax	32.64	58.34	84.05	135.68	217.94	382.46	546.98	711.50	1040.54	1534.10	3179.30
Percentage of earnings
NICs	6.9	7.6	7.9	6.1	4.6	3.0	2.3	1.8	1.3	0.9	0.5
Income tax	15.9	18.9	20.4	22.0	26.5	31.0	33.2	34.6	36.1	37.3	38.6
Married couple, one earner: no children
£ per week
Gross income	205.65	308.45	411.30	616.95	822.60	1233.90	1645.20	2056.50	2879.10	4113.00	8226.00
NICs	14.17	23.42	32.68	37.51	37.51	37.51	37.51	37.51	37.51	37.51	37.51
Income tax	22.83	48.54	74.24	125.66	202.25	366.77	531.29	695.81	1024.85	1518.41	3163.61
Percentage of earnings
NICs	6.9	7.6	7.9	6.1	4.6	3.0	2.3	1.8	1.3	0.9	0.5
Income tax	11.1	15.7	18.1	20.4	24.6	29.7	32.3	33.8	35.6	36.9	38.5
Married couple, one earner: 2 children
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1233.90	1645.20	2056.30	2879.10	4113.00	8226.00
NICs	14.17	23.42	32.68	37.51	37.51	37.51	37.51	37.51	37.51	37.51	37.51
Income tax (less child benefit)	2.78	28.49	54.19	105.61	182.20	346.72	511.24	675.76	1004.80	1498.36	3143.56
Percentage of earnings
NICs	6.9	7.6	7.9	6.1	4.6	3.0	2.3	1.8	1.3	0.9	0.5
Income tax (less child benefit)	1.4	9.2	13.2	17.1	22.1	28.1	31.1	32.9	34.9	36.4	38.2
Married couple, 2 earners, no children: Earnings split 60:40
£ per week
Gross income	205.65	308.48	411.30	616.95	822.60	1233.90	1645.20	2056.50	2879.10	4113.00	8226.00
NICs	9.83	19.08	28.34	46.85	62.78	75.02	75.02	75.02	75.02	75.02	75.02
Income tax	4.06	29.76	55.47	106.88	158.29	273.96	420.20	584.72	913.76	1407.32	3052.52
Percentage of earnings
NICs	4.8	6.2	6.9	7.6	7.6	6.1	4.6	3.6	2.6	1.8	0.9
Income tax	2.0	9.6	13.5	17.3	19.2	22.2	25.5	28.4	31.7	34.2	37.1

Notes to Tables:

1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earner, including wives are assumed to pay Class 1 National Insurance contributions at the contracted-in rate. Child benefit is deducted from income tax so as to provide comparability with figures for earlier years when support was partly given through child tax allowances.

2. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1996-97 and 1997-98 are based on earnings growth assumptions of 3¾ per cent. in 1996-97 and 4 per cent. in 1997-98 on line with the illustrative assumptions set out in the Financial Statement and Budget Report.

3. The figures for an indexed 1991-92 tax system show the tax payments that would result if the 1991-92 income tax system had been indexed to 1997-98 using the increase in the Retail Prices Index between December 1990 and September 1996, and income tax and national insurance contributions rates had been kept at their 1991-92 levels.

4. Real take-home pay includes earnings and child benefit less direct tax payments (income tax and national insurance contributions) deflated to 1996-97 prices using the Retail Prices Index. Indirect taxes and council tax are included in the Retail Prices Index and therefore in the inflation adjustment. Those on low earnings may be entitled to income-related benefits not included in these calculations.

5. Figures for indirect taxes include estimates of the effects of the main intermediate taxes on households as well as the impact of taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.

6. Figures for indirect taxes and council tax are estimated from expenditure patterns in the 1994-95 Family Expenditure Survey uprated to later years using forecasts of aggregate tax receipts. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.

7. Estimates of indirect taxes are very approximate, even within the range for which figures are shown, because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside the range shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years, so reliable comparisons cannot be made between the estimates for different years.

11 Dec 1996 : Column: 201

11 Dec 1996 : Column: 201

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