§ Miss Joan Hall
asked the Chancellor of the Exchequer how many people in full-time employment were exempt from paying income tax in the last five years to the nearest date.
§ Mr. Nott
There are two special reliefs for taxpayers aged 65 and over. One 315W is age exemption, which gives complete exemption from income tax if the taxpayer's total income does not exceed a specified amount. The other is age relief, which gives the equivalent of earned income relief on investment income provided that total income does not exceed a certain limit.
For the tax year 1970–71 the income limits for age exemption were £475 and £740 for single people and married men respectively. These were raised to £505 and £786 by the Finance Act, 1971, and to £634 and £929 respectively by the Finance Act, 1972. For age relief, the income limit for a married man was raised from £1,000 to £1,200 by the Finance Act, 1971.
Under the unified tax system which will come into effect on 6th April, 1973, the first £2,000 of investment income will be taxed at the rate applicable to earned income and age relief will therefore no longer have any application. It is estimated that approximately 30 per cent. of the benefit of unification will go to the 11 per cent. of taxpayers who are retired.
The estate duty relief for the surviving spouse and the capital gains small disposal relief of £500 are likely to have been of especial benefit to the retired.
§ Mr. Sheldon
asked the Chancellor of the Exchequer (1) what estimate he has made of loss of revenue if the first £200, £250, £300 and £400 of taxable income were to be charged at 25 per cent.; and what proportion of this loss would be attributable to those with incomes of less than £2,000;
(2) what estimate he has made of the amount of revenue to be raised in income tax in the bands £3,000 to £3,500, £3,500 to £4,000, £4,000 to £4,500 and £4,500 to £5,000; and what these amounts would be if the income tax rate were to be increased by 5 per cent. or 10 per cent. or reduced by 5 per cent.