§ Mr. William Powell
To ask the Chancellor of the Exchequer what is his estimate of the amount of income tax the Exchequer would forgo in 1990–91(a) if all income from savings were exempted from the tax and (b) if income tax were chargeable only to higher rate taxpayers on such income.
§ Mr. Ryder
The direct revenue cost of exempting from income tax the investment income received by individual savers, including interest received on bank and building society accounts, national savings and dividends received from companies, is estimated to be about £10.5 billion. If the income from savings of higher rate taxpayers remained chargeable to income tax, at their marginal rate of tax, the cost would be reduced to about £5 billion.