29 November 1994 IR1 INCOME TAX RATES AND ALLOWANCES The Chancellor proposes in his Budget to: - increase in line with inflation: - the personal allowance for those aged under 65; - the basic rate limit, above which higher rate tax is paid; - the income limit for age-related allowances; - increase the lower rate band by pounds 200 - double the increase under statutory indexation; - increase the personal allowance for those aged 65 and over by pounds 330 above the increase under statutory indexation, giving an increase of pounds 430 in all; - make no change to the rates of income tax. DETAILS 1. The Chancellor's proposals will result in the following rates and bands: Rate of tax 1994-95 1995-96 (per cent) Taxable income Taxable income (pounds) (pounds) Lower (20) 0 - 3,000 0 - 3,200 Basic (25) 3,001 - 23,700 3,201 - 24,300 Higher (40) Over 23,700 Over 24,300 Taxable income is defined as gross income for tax purposes, less those allowances and reliefs available at the taxpayer's marginal rate. 2. The increase in the lower rate band will mean that in 1995-96 approximately 5.4 million people will pay tax at 20 per cent only. 3. The proposed levels of allowances are: 1994-95 1995-96 (pounds) (pounds) Personal allowance 3,445 3,525 Personal allowance (age 65-74) 4,200 4,630 Personal allowance (age 75 and over) 4,370 4,800 Married couple's allowance, additional personal allowance and widow's bereavement allowance 1,720* 1,720* Married couple's allowance (age 65 - 74) 2,665* 2,995* Married couple's allowance (age 75 and over) 2,705* 3,035* Blind person's allowance 1,200 1,200 Income limit for age-related 14,200 14,600 allowances *Allowances where relief is restricted to 20 per cent in 1994-95 and 15 per cent in 1995-96. 4. In the Budget in November 1993 the Chancellor announced that relief for the married couple's allowance and the allowances linked to it would be restricted to 15 per cent in 1995-96. He also announced an increase of pounds 330 in the married couple's allowance for those aged 65 and over, so that the extra tax paid by the elderly as a result of this change would be no greater than for people aged under 65 on similar incomes. The extra increase in the personal allowance for those aged 65 and over announced today will mean that nobody in that age group will be brought into tax as a result of the restriction. 5. The restriction of the married couple's allowance to give relief at 15 per cent in 1995-96 will also apply to the allowances and reliefs which are set at the same level as the married couple's allowance for those aged under 65, that is: the additional personal allowance (mainly for single parents); the widow's bereavement allowance (given to a widow in the year of her husband's death and the following year); and the relief for maintenance payments to a divorced or separated spouse. Relief for maintenance payments 6. People making maintenance payments qualify for tax relief on the amounts they pay, up to a limit of pounds 1,720. From 6 April 1995 the rate of relief will be reduced to 15 per cent. 7. Those with maintenance arrangements made before 15 March 1988 may qualify for relief on payments in excess of pounds 1,720 up to the total amount on which they received relief in 1988-89. Relief on the first pounds 1,720 of their payments will be restricted to 15 per cent from 6 April 1995. Payments between pounds 1,720 and their 1988-89 limit will continue to qualify for relief at their marginal rate of tax. The tax treatment of people receiving maintenance payments will not change. Changes to PAYE codes 8. Most PAYE codes will change as a result of the measures announced today. The effect of the changes to the married couple's allowance, and related allowances, on the PAYE codes of people who have these allowances depends on the expected level of their income. Those who receive these allowances will, therefore, be sent an individual notice of coding. People who only receive the personal allowance will have their code adjusted by their employer or pension provider in accordance with general instructions issued by their tax office. These people will not receive a notice of coding unless one is required for some other reason. NOTES FOR EDITORS Statutory Indexation 1. Income tax legislation requires the main allowances and thresholds to be increased in line with the Retail Prices Index in the year to September, unless Parliament determines otherwise. The 1994 Finance Act set the levels of the married couple's allowance for 1995-96. 2. Changes in allowances have to be rounded up to the nearest multiple of pounds 10, and thresholds and bands to the nearest multiple of pounds 100. 3. The indexed figures for allowances and thresholds not already determined by Parliament are set out below (together with the actual figures proposed by the Chancellor), and also in an Order made today by the Treasury, as required by law. 1995-96 1995-96 (proposed) (if indexed) (pounds) (pounds) Personal allowance 3,525 3,525 Personal allowance (age 65-74) 4,630 4,300 Personal allowance (age 75 4,470 4,800 and over) Income limit for age related allowances 14,600 14,600 Lower rate limit 3,200 3,100 Basic rate limit 24,300 24,300 Illustrative Changes 4. The effects on individual taxpayers at various levels of income of the changes which will take effect in April 1995 are illustrated in the attached statistical tables. Revenue Effects 5. Increasing the lower rate band and the personal allowance for those aged 65 and over will have an overall cost of pounds 230 million in 1995-96 (pounds 300 million in a full year) and pounds 310 million in 1996-97, compared with indexation. INCOME TAX RATES AND ALLOWANCES 1995-96 ILLUSTRATIVE TABLES 1. The effects of the changes to the income tax rates and allowances proposed in the Budget on individual taxpayers at various levels of income are illustrated in the tables below. 2. The tables assume that the taxpayer has no tax reliefs other than the appropriate personal and married couple's allowance (and that where the individual has the married couple's allowance he or she is receiving the full amount of the allowance, including the age-related allowance if they are 65 or over and their income is below the aged income limit). The tax liability of people with the additional personal allowance or the widow's bereavement allowance is the same as for people aged under 65 with the married couple's allowance. KEY TO TABLES Table 1 and 2 Annual income tax changes Table 3 and 4 Weekly income tax changes Table 5 Weekly income tax and national insurance changes Table 6 Weekly income tax,national insurance and child benefit changes Tables 7 to 10 Income tax changes compared with indexation Tables 11 to 13 'Dynamic' comparison assuming increases in earnings 1. Tables 1 to 4 show the combined effects of the income tax measures announced today and those announced in the November 1993 Budget. 2. Tables 5 and 6 show the combined effect of the income tax and national insurance measures announced in the two Budgets, and the change in child benefit announced today. 3. Tables 7 to 10 compare the proposed levels of income tax in 1995-96 with what they would have been under statutory indexation of the 1994-95 allowances and thresholds. 4. Tables 11 to 13 illustrate the changes from 1994-95 to 1995-96 after taking account of increases in earnings. For illustration an increase in earnings of 4.5 per cent has been assumed. Table 1 Annual income tax changes People with personal allowance only Annual Income tax charge Proposed charge Change in tax income for 1994-95 1995-96 Pounds Pounds per cent Pounds per cent Pounds per cent Under 65 4,000 111 2.8 95 2.4 -16 -0.4 5,000 311 6.2 295 5.9 -16 -0.3 6,000 511 8.5 495 8.3 -16 -0.3 7,000 739 10.6 709 10.1 -30 -0.4 8,000 989 12.4 959 12.0 -30 -0.4 10,000 1,489 14.9 1,459 14.6 -30 -0.3 12,000 1,989 16.6 1,959 16.3 -30 -0.3 16,000 2,989 18.7 2,959 18.5 -30 -0.2 20,000 3,989 19.9 3,959 19.8 -30 -0.2 30,000 6,917 23.1 6,785 22.6 -132 -0.4 50,000 14,917 29.8 14,785 29.6 -132 -0.3 80,000 26,917 33.6 26,785 33.5 -132 -0.2 100,000 34,917 34.9 34,785 34.8 -132 -0.1 150,000 54,917 36.6 54,785 36.5 -132 -0.1 Aged 65-74 5,000 160 3.2 74 1.5 -86 -1.7 6,000 360 6.0 274 4.6 -86 -1.4 7,000 560 8.0 474 6.8 -86 -1.2 8,000 800 10.0 683 8.5 -118 -1.5 10,000 1,300 13.0 1,183 11.8 -118 -1.2 12,000 1,800 15.0 1,683 14.0 -118 -1.0 14,000 2,300 16.4 2,183 15.6 -118 -0.8 16,000 2,989 18.7 2,858 17.9 -131 -0.8 18,000 3,489 19.4 3,459 19.2 -30 -0.2 20,000 3,989 19.9 3,959 19.8 -30 -0.2 Aged 75 or over 5,000 126 2.5 40 0.8 -86 -1.7 6,000 326 5.4 240 4.0 -86 -1.4 7,000 526 7.5 440 6.3 -86 -1.2 8,000 758 9.5 640 8.0 -118 -1.5 10,000 1,258 12.6 1,140 11.4 -118 -1.2 12,000 1,758 14.6 1,640 13.7 -118 -1.0 14,000 2,258 16.1 2,140 15.3 -118 -0.8 16,000 2,983 18.6 2,815 17.6 -168 -1.0 18,000 3,489 19.4 3,459 19.2 -30 -0.2 20,000 3,989 19.9 3,959 19.8 -30 -0.2 For incomes above the levels shown for those aged 65 or over, the figures are the same as those for the non-aged. If total income, less allowable deductions, of a taxpayer aged 65 or over exceeds the income limit, the age-related allowances are reduced by Pound 1 for each additional Pounds 2 of income until the basic levels of the personal and married couple's allowances are reached. Table 2 Annual income tax changes People with personal allowance and married couple's allowance Annual Income tax charge Proposed charge Change in tax income for 1994-95 1995-96 Pounds Pounds per cent Pounds per cent Pounds per cent Under 65 5,000 0 0.0 37 0.7 37 0.7 6,000 167 2.8 237 4.0 70 1.2 7,000 395 5.6 451 6.4 56 0.8 8,000 645 8.1 701 8.8 56 0.7 10,000 1,145 11.4 1,201 12.0 56 0.6 12,000 1,645 13.7 1,701 14.2 56 0.5 16,000 2,645 16.5 2,701 16.9 56 0.4 20,000 3,645 18.2 3,701 18.5 56 0.3 30,000 6,573 21.9 6,527 21.8 -46 -0.2 50,000 14,573 29.1 14,527 29.1 -46 -0.1 80,000 26,573 33.2 26,527 33.2 -46 -0.1 100,000 34,573 34.6 34,527 34.5 -46 -0.0 150,000 54,573 36.4 54,527 36.4 -46 -0.0 Aged 65-74 7,000 27 0.4 25 0.4 -2 -0.0 8,000 267 3.3 233 2.9 -34 -0.4 9,000 517 5.7 483 5.4 -34 -0.4 10,000 767 7.7 733 7.3 -34 -0.3 12,000 1,267 10.6 1,233 10.3 -34 -0.3 14,000 1,767 12.6 1,733 12.4 -34 -0.2 16,000 2,485 15.5 2,408 15.1 -77 -0.5 18,000 3,145 17.5 3,099 17.2 -46 -0.3 20,000 3,645 18.2 3,701 18.5 56 0.3 Aged 75 or over 8,000 217 2.7 185 2.3 -32 -0.4 9,000 467 5.2 435 4.8 -32 -0.4 10,000 717 7.2 685 6.8 -32 -0.3 12,000 1,217 10.1 1,185 9.9 -32 -0.3 14,000 1,717 12.3 1,685 12.0 -32 -0.2 16,000 2,442 15.3 2,360 14.7 -82 -0.5 18,000 3,143 17.5 3,067 17.0 -76 -0.4 20,000 3,645 18.2 3,701 18.5 56 0.3 For incomes above the levels shown for those aged 65 or over, the figures are the same as those for the non-aged. If total income, less allowable deductions, of a taxpayer aged 65 or over exceeds the income limit, the age-related allowances are reduced by Pound 1 for each additional Pounds 2 of income until the basic levels of the personal and married couple's allowances are reached. Table 3 Weekly income tax changes People with personal allowance only Weekly Income tax charge Proposed charge Change in tax income for 1994-95 1995-96 Pounds Pounds per cent Pounds per cent Pounds per cent Under 65 80 2.75 3.4 2.44 3.1 -0.31 -0.4 100 6.75 6.8 6.44 6.4 -0.31 -0.3 125 11.80 9.4 11.44 9.2 -0.36 -0.3 150 18.05 12.0 17.48 11.7 -0.58 -0.4 200 30.55 15.3 29.98 15.0 -0.58 -0.3 300 55.55 18.5 54.98 18.3 -0.58 -0.2 400 80.55 20.1 79.98 20.0 -0.58 -0.1 500 105.55 21.1 104.98 21.0 -0.58 -0.1 600 142.25 23.7 139.71 23.3 -2.54 -0.4 800 222.25 27.8 219.71 27.5 -2.54 -0.3 1,000 302.25 30.2 299.71 30.0 -2.54 -0.3 Aged 65-74 90 1.85 2.1 0.19 0.2 -1.65 -1.8 100 3.85 3.8 2.19 2.2 -1.65 -1.7 125 8.85 7.1 7.19 5.8 -1.65 -1.3 150 14.42 9.6 12.19 8.1 -2.23 -1.5 200 26.92 13.5 24.66 12.3 -2.26 -1.1 300 55.29 18.4 52.07 17.4 -3.22 -1.1 400 80.55 20.1 79.98 20.0 -0.58 -0.1 500 105.55 21.1 104.98 21.0 -0.58 -0.1 Aged 75 or over 90 1.19 1.3 0.00 0.0 -1.19 -1.3 100 3.19 3.2 1.54 1.5 -1.65 -1.7 125 8.19 6.6 6.54 5.2 -1.65 -1.3 150 13.61 9.1 11.54 7.7 -2.07 -1.4 200 26.11 13.1 23.85 11.9 -2.26 -1.1 300 54.47 18.2 51.25 17.1 -3.22 -1.1 400 80.55 20.1 79.98 20.0 -0.58 -0.1 500 105.55 21.1 104.98 21.0 -0.58 -0.1 For incomes above the levels shown for those aged 65 or over, the figures are the same as those for the non-aged. If total income, less allowable deductions, of a taxpayer aged 65 or over exceeds the income limit, the age-related allowances are reduced by Pound 1 for each additional Pounds 2 of income until the basic levels of the personal and married couple's allowances are reached. Table 4 Weekly income tax changes People with personal allowance and married couple's allowance Weekly Income tax charge Proposed charge Change in tax income for 1994-95 1995-96 Pounds Pounds per cent Pounds per cent Pounds per cent Under 65 95 0.00 0.0 0.48 0.5 0.48 0.5 100 0.13 0.1 1.48 1.5 1.35 1.3 125 5.19 4.2 6.48 5.2 1.29 1.0 150 11.44 7.6 12.51 8.3 1.08 0.7 200 23.94 12.0 25.01 12.5 1.08 0.5 300 48.94 16.3 50.01 16.7 1.08 0.4 400 73.94 18.5 75.01 18.8 1.08 0.3 500 98.94 19.8 100.01 20.0 1.08 0.2 600 135.63 22.6 134.75 22.5 -0.88 -0.1 800 215.63 27.0 214.75 26.8 -0.88 -0.1 1,000 295.63 29.6 294.75 29.5 -0.88 -0.1 Aged 65-74 140 1.67 1.2 1.55 1.1 -0.12 -0.1 150 4.17 2.8 3.55 2.4 -0.62 -0.4 200 16.67 8.3 16.02 8.0 -0.65 -0.3 250 29.17 11.7 28.52 11.4 -0.65 -0.3 300 45.04 15.0 43.43 14.5 -1.61 -0.5 400 73.94 18.5 75.01 18.8 1.08 0.3 500 98.94 19.8 100.01 20.0 1.08 0.2 Aged 75 or over 140 0.79 0.6 0.78 0.6 -0.00 -0.0 150 3.20 2.1 2.78 1.9 -0.42 -0.3 200 15.70 7.9 15.09 7.5 -0.61 -0.3 250 28.20 11.3 27.59 11.0 -0.61 -0.2 300 44.07 14.7 42.50 14.2 -1.57 -0.5 400 73.94 18.5 75.01 18.8 1.08 0.3 500 98.94 19.8 100.01 20.0 1.08 0.2 For incomes above the levels shown for those aged 65 or over, the figures are the same as those for the non-aged. If total income, less allowable deductions, of a taxpayer aged 65 or over exceeds the income limit, the age-related allowances are reduced by Pound 1 for each additional Pounds 2 of income until the basic levels of the personal and married couple's allowances are reached. Table 5 Weekly effect of income tax and national insurance changes Charge for 1994-95 Proposed charge for Change in net 1995-96 income Weekly Income NIC(2) Net Income NIC(2) Net In cash As income(1) tax income tax income terms percentage after tax after tax of income and NIC and NIC Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds per cent People with personal allowance only (under 65) 80 2.75 3.44 73.81 2.44 3.28 74.28 0.47 0.6 90 4.75 4.44 80.81 4.44 4.28 81.28 0.47 0.5 100 6.75 5.44 87.81 6.44 5.28 88.28 0.47 0.5 125 11.80 7.94 105.26 11.44 7.78 105.78 0.52 0.4 150 18.05 10.44 121.51 17.48 10.28 122.24 0.74 0.5 175 24.30 12.94 137.76 23.73 12.78 138.49 0.74 0.4 200 30.55 15.44 154.01 29.98 15.28 154.74 0.74 0.4 250 43.05 20.44 186.51 42.48 20.28 187.24 0.74 0.3 300 55.55 25.44 219.01 54.98 25.28 219.74 0.74 0.2 350 68.05 30.44 251.51 67.48 30.28 252.24 0.74 0.2 400 80.55 35.44 284.01 79.98 35.28 284.74 0.74 0.2 450 93.05 38.44 318.51 92.48 39.28 318.24 -0.26 -0.1 500 105.55 38.44 356.01 104.98 39.28 355.74 -0.26 -0.1 600 142.25 38.44 419.31 139.71 39.28 421.01 1.70 0.3 700 182.25 38.44 479.31 179.71 39.28 481.01 1.70 0.2 800 222.25 38.44 539.31 219.71 39.28 541.01 1.70 0.2 1,000 302.25 38.44 659.31 299.71 39.28 661.01 1.70 0.2 People with personal allowance and married couple's allowance (under 65) 80 0.00 3.44 76.56 0.00 3.28 76.72 0.16 0.2 90 0.00 4.44 85.56 0.00 4.28 85.72 0.16 0.2 100 0.13 5.44 94.43 1.48 5.28 93.24 -1.19 -1.2 125 5.19 7.94 111.87 6.48 7.78 110.74 -1.13 -0.9 150 11.44 10.44 128.12 12.51 10.28 127.21 -0.92 -0.6 175 17.69 12.94 144.37 18.76 12.78 143.46 -0.92 -0.5 200 23.94 15.44 160.62 25.01 15.28 159.71 -0.92 -0.5 250 36.44 20.44 193.12 37.51 20.28 192.21 -0.92 -0.4 300 48.94 25.44 225.62 50.01 25.28 224.71 -0.92 -0.3 350 61.44 30.44 258.12 62.51 30.28 257.21 -0.92 -0.3 400 73.94 35.44 290.62 75.01 35.28 289.71 -0.92 -0.2 450 86.44 38.44 325.12 87.51 39.28 323.21 -1.92 -0.4 500 98.94 38.44 362.62 100.01 39.28 360.71 -1.92 -0.4 600 135.63 38.44 425.93 134.75 39.28 425.97 0.04 0.0 700 175.63 38.44 485.93 174.75 39.28 485.97 0.04 0.0 800 215.63 38.44 545.93 214.75 39.28 545.97 0.04 0.0 1,000 295.63 38.44 665.93 294.75 39.28 665.97 0.04 0.0 (1) It is assumed that all income is earned. (2) National Insurance Contributions are at the standard class 1 rate for employees not contracted-out of the State additional (earnings related) pension scheme. Table 6 Weekly effect of income tax, national insurance and child benefit changes Charge for 1994-95 Proposed charge for Change in net 1995-96 income Weekly Child Income Net Percentage Child Income Net Percentage In cash As income(1) benefit tax and income(3) of income benefit tax and income(3) of income terms percentage NIC(2) taken in tax NIC(2) taken in tax of income NIC and CB(4) NIC and CB(4) Pounds Pounds Pounds Pounds per cent Pounds Pounds Pounds per cent Pounds per cent People with personal allowance and married couple's allowance (under 65) with 1 child 80 10.20 3.44 86.76 -8.5 10.40 3.28 87.12 -8.9 0.36 0.5 90 10.20 4.44 95.76 -6.4 10.40 4.28 96.12 -6.8 0.36 0.4 100 10.20 5.57 104.63 -4.6 10.40 6.76 103.64 -3.6 -0.99 -1.0 125 10.20 13.13 122.07 2.3 10.40 14.26 121.14 3.1 -0.93 -0.7 150 10.20 21.88 138.32 7.8 10.40 22.79 137.61 8.3 -0.72 -0.5 200 10.20 39.38 170.82 14.6 10.40 40.29 170.11 14.9 -0.72 -0.4 250 10.20 56.88 203.32 18.7 10.40 57.79 202.61 19.0 -0.72 -0.3 300 10.20 74.38 235.82 21.4 10.40 75.29 235.11 21.6 -0.72 -0.2 350 10.20 91.88 268.32 23.3 10.40 92.79 267.61 23.5 -0.72 -0.2 400 10.20 109.38 300.82 24.8 10.40 110.29 300.11 25.0 -0.72 -0.2 450 10.20 124.88 335.32 25.5 10.40 126.79 333.61 25.9 -1.72 -0.4 500 10.20 137.38 372.82 25.4 10.40 139.29 371.11 25.8 -1.72 -0.3 600 10.20 174.07 436.13 27.3 10.40 174.03 436.37 27.3 0.24 0.0 700 10.20 214.07 496.13 29.1 10.40 214.03 496.37 29.1 0.24 0.0 800 10.20 254.07 556.13 30.5 10.40 254.03 556.37 30.5 0.24 0.0 1,000 10.20 334.07 676.13 32.4 10.40 334.03 676.37 32.4 0.24 0.0 People with personal allowance and married couple's allowance (under 65) with 2 children 80 18.45 3.44 95.01 -18.8 18.85 3.28 95.57 -19.5 0.56 0.7 90 18.45 4.44 104.01 -15.6 18.85 4.28 104.57 -16.2 0.56 0.6 100 18.45 5.57 112.88 -12.9 18.85 6.76 112.09 -12.1 -0.79 -0.8 125 18.45 13.13 130.32 -4.3 18.85 14.26 129.59 -3.7 -0.73 -0.6 150 18.45 21.88 146.57 2.3 18.85 22.79 146.06 2.6 -0.52 -0.3 200 18.45 39.38 179.07 10.5 18.85 40.29 178.56 10.7 -0.52 -0.3 250 18.45 56.88 211.57 15.4 18.85 57.79 211.06 15.6 -0.52 -0.2 300 18.45 74.38 244.07 18.6 18.85 75.29 243.56 18.8 -0.52 -0.2 350 18.45 91.88 276.57 21.0 18.85 92.79 276.06 21.1 -0.52 -0.1 400 18.45 109.38 309.07 22.7 18.85 110.29 308.56 22.9 -0.52 -0.1 450 18.45 124.88 343.57 23.7 18.85 126.79 342.06 24.0 -1.52 -0.3 500 18.45 137.38 381.07 23.8 18.85 139.29 379.56 24.1 -1.52 -0.3 600 18.45 174.07 444.38 25.9 18.85 174.03 444.82 25.9 0.44 0.1 700 18.45 214.07 504.38 27.9 18.85 214.03 504.82 27.9 0.44 0.1 800 18.45 254.07 564.38 29.5 18.85 254.03 564.82 29.4 0.44 0.1 1,000 18.45 334.07 684.38 31.6 18.85 334.03 684.82 31.5 0.44 0.0 (1) It is assumed that all income is earned. (2) National Insurance Contributions are at the standard class 1 rate for employees not contracted-out of the State additional (earnings related) pension scheme. (3) Net income is earnings, less tax and National Insurance Contributions, plus child benefit. It does not include any income-related benefit. (4) A minus sign indicates that child benefit exceeds income tax and National Insurance Contributions. Table 7 Annual effect of income tax changes compared with indexation People with personal allowance only Annual Charge under Proposed charge Change in net income income indexation(1) for 1995-96 compared with indexation pounds pounds per cent pounds per cen pounds per cent Under 65 4,000 95 2.4 95 2.4 0 0.0 5,000 295 5.9 295 5.9 0 0.0 6,000 495 8.3 495 8.3 0 0.0 8,000 964 12.0 959 12.0 5 0.1 10,000 1,464 14.6 1,459 14.6 5 0.1 12,000 1,964 16.4 1,959 16.3 5 0.0 16,000 2,964 18.5 2,959 18.5 5 0.0 20,000 3,964 19.8 3,959 19.8 5 0.0 25,000 5,214 20.9 5,209 20.8 5 0.0 30,000 6,790 22.6 6,785 22.6 5 0.0 50,000 14,790 29.6 14,785 29.6 5 0.0 Aged 65-74 5,000 140 2.8 74 1.5 66 1.3 6,000 340 5.7 274 4.6 66 1.1 7,000 540 7.7 474 6.8 66 0.9 8,000 770 9.6 683 8.5 88 1.1 10,000 1,270 12.7 1,183 11.8 88 0.9 12,000 1,770 14.8 1,683 14.0 88 0.7 14,000 2,270 16.2 2,183 15.6 88 0.6 15,000 2,570 17.1 2,483 16.6 88 0.6 16,000 2,945 18.4 2,858 17.9 88 0.5 18,000 3,464 19.2 3,459 19.2 5 0.0 20,000 3,964 19.8 3,959 19.8 5 0.0 Aged 75 or over 5,000 106 2.1 40 0.8 66 1.3 6,000 306 5.1 240 4.0 66 1.1 7,000 506 7.2 440 6.3 66 0.9 8,000 728 9.1 640 8.0 88 1.1 10,000 1,228 12.3 1,140 11.4 88 0.9 12,000 1,728 14.4 1,640 13.7 88 0.7 14,000 2,228 15.9 2,140 15.3 88 0.6 15,000 2,528 16.9 2,440 16.3 88 0.6 16,000 2,903 18.1 2,815 17.6 88 0.5 18,000 3,464 19.2 3,459 19.2 5 0.0 20,000 3,964 19.8 3,959 19.8 5 0.0 (1)On basis of allowances, lower rate band and basic rate limit indexed in accordance with the statutory provisions. Table 8 Annual effect of income tax changes compared with indexation People with personal allowance and married couple's allowance Annual Charge under Proposed charge Change in net income income indexation(1) for 1995-96 compared with indexation pounds pounds per cent pounds per cent pounds per cent Under 65 5,000 0 0.0 37 0.7 -37 -0.7 6,000 143 2.4 237 4.0 -94 -1.6 7,000 362 5.2 451 6.4 -89 -1.3 8,000 612 7.6 701 8.8 -89 -1.1 10,000 1,112 11.1 1,201 12.0 -89 -0.9 12,000 1,612 13.4 1,701 14.2 -89 -0.7 16,000 2,612 16.3 2,701 16.9 -89 -0.6 20,000 3,612 18.1 3,701 18.5 -89 -0.4 25,000 4,862 19.4 4,951 19.8 -89 -0.4 30,000 6,438 21.5 6,527 21.8 -89 -0.3 50,000 14,438 28.9 14,527 29.1 -89 -0.2 Aged 65-74 7,000 0 0.0 25 0.4 -25 -0.4 8,000 225 2.8 233 2.9 -8 -0.1 9,000 475 5.3 483 5.4 -8 -0.1 10,000 725 7.3 733 7.3 -8 -0.1 12,000 1,225 10.2 1,233 10.3 -8 -0.1 14,000 1,725 12.3 1,733 12.4 -8 -0.1 15,000 2,025 13.5 2,033 13.6 -8 -0.1 16,000 2,400 15.0 2,408 15.1 -8 -0.1 18,000 3,104 17.2 3,099 17.2 5 0.0 20,000 3,612 18.1 3,701 18.5 -89 -0.4 Aged 75 or over 8,000 175 2.2 185 2.3 -10 -0.1 9,000 425 4.7 435 4.8 -10 -0.1 10,000 675 6.7 685 6.8 -10 -0.1 12,000 1,175 9.8 1,185 9.9 -10 -0.1 14,000 1,675 12.0 1,685 12.0 -10 -0.1 15,000 1,975 13.2 1,985 13.2 -10 -0.1 16,000 2,350 14.7 2,360 14.7 -10 -0.1 18,000 3,062 17.0 3,067 17.0 -6 -0.0 20,000 3,612 18.1 3,701 18.5 -89 -0.4 (1)On basis of allowances, lower rate band and basic rate limit indexed in accordance with the statutory provisions. Table 9 Weekly effect of income tax changes compared with indexation People with personal allowance only Weekly Charge under Proposed charge Change in net income income indexation(1) for 1995-96 compared with indexation pounds pounds per cent pounds per cent pounds per cent Under 65 80 2.44 3.1 2.44 3.1 0.00 0.0 100 6.44 6.4 6.44 6.4 0.00 0.0 125 11.44 9.2 11.44 9.2 0.00 0.0 150 17.57 11.7 17.48 11.7 0.10 0.1 200 30.07 15.0 29.98 15.0 0.10 0.0 300 55.07 18.4 54.98 18.3 0.10 0.0 400 80.07 20.0 79.98 20.0 0.10 0.0 500 105.07 21.0 104.98 21.0 0.10 0.0 600 139.81 23.3 139.71 23.3 0.10 0.0 800 219.81 27.5 219.71 27.5 0.10 0.0 1,000 299.81 30.0 299.71 30.0 0.10 0.0 Aged 65-74 90 1.46 1.6 0.19 0.2 1.27 1.4 100 3.46 3.5 2.19 2.2 1.27 1.3 125 8.46 6.8 7.19 5.8 1.27 1.0 150 13.85 9.2 12.19 8.1 1.65 1.1 200 26.35 13.2 24.66 12.3 1.68 0.8 250 38.85 15.5 37.16 14.9 1.68 0.7 275 45.10 16.4 43.41 15.8 1.68 0.6 300 53.75 17.9 52.07 17.4 1.68 0.6 350 67.57 19.3 67.48 19.3 0.10 0.0 400 80.07 20.0 79.98 20.0 0.10 0.0 500 105.07 21.0 104.98 21.0 0.10 0.0 Aged 75 or over 90 0.81 0.9 0.00 0.0 0.81 0.9 100 2.81 2.8 1.54 1.5 1.27 1.3 125 7.81 6.2 6.54 5.2 1.27 1.0 150 13.03 8.7 11.54 7.7 1.49 1.0 200 25.53 12.8 23.85 11.9 1.68 0.8 250 38.03 15.2 36.35 14.5 1.68 0.7 275 44.28 16.1 42.60 15.5 1.68 0.6 300 52.93 17.6 51.25 17.1 1.68 0.6 350 67.57 19.3 67.48 19.3 0.10 0.0 400 80.07 20.0 79.98 20.0 0.10 0.0 500 105.07 21.0 104.98 21.0 0.10 0.0 (1)On basis of allowances, lower rate band and basic rate limit indexed in accordance with the statutory provisions. Table 10 Weekly effect of income tax changes compared with indexation People with personal allowance and married couple's allowance Weekly Charge under Proposed charge Change in net income income indexatation(1) for 1995-96 compared with indexation pounds pounds per cent pounds per cent pounds per cent Under 65 95 0.00 0.0 0.48 0.5 -0.48 -0.5 100 0.00 0.0 1.48 1.5 -1.48 -1.5 125 4.67 3.7 6.48 5.2 -1.81 -1.4 150 10.80 7.2 12.51 8.3 -1.71 -1.1 200 23.30 11.7 25.01 12.5 -1.71 -0.9 300 48.30 16.1 50.01 16.7 -1.71 -0.6 400 73.30 18.3 75.01 18.8 -1.71 -0.4 500 98.30 19.7 100.01 20.0 -1.71 -0.3 600 133.04 22.2 134.75 22.5 -1.71 -0.3 800 213.04 26.6 214.75 26.8 -1.71 -0.2 1,000 293.04 29.3 294.75 29.5 -1.71 -0.2 Aged 65-74 140 0.98 0.7 1.55 1.1 -0.57 -0.4 150 3.37 2.2 3.55 2.4 -0.19 -0.1 175 9.62 5.5 9.77 5.6 -0.16 -0.1 200 15.87 7.9 16.02 8.0 -0.16 -0.1 250 28.37 11.3 28.52 11.4 -0.16 -0.1 275 34.62 12.6 34.77 12.6 -0.16 -0.1 300 43.27 14.4 43.43 14.5 -0.16 -0.1 350 60.80 17.4 60.84 17.4 -0.04 -0.0 400 73.30 18.3 75.01 18.8 -1.71 -0.4 500 98.30 19.7 100.01 20.0 -1.71 -0.3 Aged 75 or over 140 0.17 0.1 0.78 0.6 -0.61 -0.4 150 2.39 1.6 2.78 1.9 -0.39 -0.3 175 8.64 4.9 8.84 5.1 -0.20 -0.1 200 14.89 7.4 15.09 7.5 -0.20 -0.1 250 27.39 11.0 27.59 11.0 -0.20 -0.1 275 33.64 12.2 33.84 12.3 -0.20 -0.1 300 42.30 14.1 42.50 14.2 -0.20 -0.1 350 60.23 17.2 60.24 17.2 -0.01 -0.0 400 73.30 18.3 75.01 18.8 -1.71 -0.4 500 98.30 19.7 100.01 20.0 -1.71 -0.3 (1)On basis of allowances, lower rate band and basic rate limit indexed in accordance with the statutory provisions. Table 11 Annual effect of income tax changes assuming incomes increase by 4 1/2 per cent Charge for 1994 Proposed charge for 1995-96 Increase in net income Annual Income Percentage Adjusted Income Percentage In cash Percentage income tax of income annual tax of income terms change in taken in tax income taken in tax net income pounds pounds per cent pounds pounds per cent pounds per cent People with personal allowance only (under 65) 4,000 111 2.8 4,180 131 3.1 160 4.1 6,000 511 8.5 6,270 549 8.8 232 4.2 8,000 989 12.4 8,360 1,049 12.5 300 4.3 10,000 1,489 14.9 10,450 1,571 15.0 368 4.3 12,000 1,989 16.6 12,540 2,094 16.7 435 4.3 14,000 2,489 17.8 14,630 2,616 17.9 502 4.4 16,000 2,989 18.7 16,720 3,139 18.8 570 4.4 18,000 3,489 19.4 18,810 3,661 19.5 638 4.4 20,000 3,989 19.9 20,900 4,184 20.0 705 4.4 25,000 5,239 21.0 26,125 5,490 21.0 874 4.4 30,000 6,917 23.1 31,350 7,325 23.4 942 4.1 40,000 10,917 27.3 41,800 11,505 27.5 1,212 4.2 50,000 14,917 29.8 52,250 15,685 30.0 1,482 4.2 60,000 18,917 31.5 62,700 19,865 31.7 1,752 4.3 70,000 22,917 32.7 73,150 24,045 32.9 2,022 4.3 80,000 26,917 33.6 83,600 28,225 33.8 2,292 4.3 People with personal allowance and married couple's allowance (under 65) 5,000 0 0.0 5,225 82 1.6 143 2.9 6,000 167 2.8 6,270 291 4.6 146 2.5 8,000 645 8.1 8,360 791 9.5 214 2.9 10,000 1,145 11.4 10,450 1,313 12.6 282 3.2 12,000 1,645 13.7 12,540 1,836 14.6 349 3.4 14,000 2,145 15.3 14,630 2,358 16.1 416 3.5 16,000 2,645 16.5 16,720 2,881 17.2 484 3.6 18,000 3,145 17.5 18,810 3,403 18.1 552 3.7 20,000 3,645 18.2 20,900 3,926 18.8 619 3.8 25,000 4,895 19.6 26,125 5,232 20.0 788 3.9 30,000 6,573 21.9 31,350 7,067 22.5 856 3.7 40,000 10,573 26.4 41,800 11,247 26.9 1,126 3.8 50,000 14,573 29.1 52,250 15,427 29.5 1,396 3.9 60,000 18,573 31.0 62,700 19,607 31.3 1,666 4.0 70,000 22,573 32.2 73,150 23,787 32.5 1,936 4.1 80,000 26,573 33.2 83,600 27,967 33.5 2,206 4.1 (1)The adjusted incomes for 1995-96 are for illustration. They have been obtained by increasing the corresponding incomes in 1994-95 by 4 1/2 per cent. Table 12 Weekly effect of income tax and national insurance changes assuming incomes increase by 4 1/2 per cent Charge for 1994-95 Proposed charge for 1995-96 Increase in net income Weekly Income tax Net Percentage Adjusted Income tax Net Percentage In cash Percentage income and NIC(2) income of income weekly and NIC income of income terms change in (1) taken in income (2) taken in net income tax & NIC (3) tax & NIC pounds pounds pounds per cent pounds pounds pounds per cent pounds per cent People with personal allowance only (under 65) 80 6.19 73.81 7.7 84 6.80 76.80 8.1 2.99 4.0 90 9.19 80.81 10.2 94 9.94 84.11 10.6 3.30 4.1 100 12.19 87.81 12.2 105 13.07 91.43 12.5 3.62 4.1 125 19.74 105.26 15.8 131 20.97 109.65 16.1 4.39 4.2 150 28.49 121.51 19.0 157 30.12 126.63 19.2 5.12 4.2 200 45.99 154.01 23.0 209 48.41 160.59 23.2 6.59 4.3 250 63.49 186.51 25.4 261 66.69 194.56 25.5 8.05 4.3 300 80.99 219.01 27.0 314 84.98 228.52 27.1 9.51 4.3 350 98.49 251.51 28.1 366 103.27 262.48 28.2 10.97 4.4 400 115.99 284.01 29.0 418 121.56 296.44 29.1 12.44 4.4 450 131.49 318.51 29.2 470 136.82 333.43 29.1 14.92 4.7 500 143.99 356.01 28.8 523 149.88 372.62 28.7 16.61 4.7 600 180.69 419.31 30.1 627 189.79 437.21 30.3 17.90 4.3 700 220.69 479.31 31.5 732 231.59 499.91 31.7 20.60 4.3 800 260.69 539.31 32.6 836 273.39 562.61 32.7 23.30 4.3 1,000 340.69 659.31 34.1 1,045 356.99 688.01 34.2 28.70 4.4 People with personal allowance and married couple's allowance (under 65) 80 3.44 76.56 4.3 84 3.64 79.96 4.4 3.40 4.4 90 4.44 85.56 4.9 94 4.98 89.07 5.3 3.51 4.1 100 5.57 94.43 5.6 105 8.11 96.39 7.8 1.96 2.1 125 13.13 111.87 10.5 131 16.01 114.61 12.3 2.74 2.4 150 21.88 128.12 14.6 157 25.16 131.59 16.0 3.47 2.7 200 39.38 160.62 19.7 209 43.44 165.56 20.8 4.93 3.1 250 56.88 193.12 22.8 261 61.73 199.52 23.6 6.40 3.3 300 74.38 225.62 24.8 314 80.02 233.48 25.5 7.86 3.5 350 91.88 258.12 26.3 366 98.31 267.44 26.9 9.32 3.6 400 109.38 290.62 27.3 418 116.59 301.41 27.9 10.78 3.7 450 124.88 325.12 27.8 470 131.86 338.39 28.0 13.27 4.1 500 137.38 362.62 27.5 523 144.92 377.58 27.7 14.96 4.1 600 174.07 425.93 29.0 627 184.83 442.17 29.5 16.24 3.8 700 214.07 485.93 30.6 732 226.63 504.87 31.0 18.94 3.9 800 254.07 545.93 31.8 836 268.43 567.57 32.1 21.64 4.0 1,000 334.07 665.93 33.4 1,045 352.03 692.97 33.7 27.04 4.1 (1)It is assumed that all income is earned. (2)National Insurance Contributions are at the standard Class 1 rate for employees not contracted-out of the State additional (earnings related) pension scheme. (3)The adjusted incomes for 1995-96 are for illustration. They have been obtained by increasing the corresponding incomes in 1994-95 by 4 1/2 per cent. Table 13 Weekly effect of income tax, national insurance and child benefit changes assuming incomes increase by 4 1/2 per cent Charge for 1994-95 Proposed charge for 1995-96 Increase in net income Weekly Child Income Net Percentage Child Income Net Percentage In cash Percentage income benefit tax and income of income benefit tax and income of income terms change in (1) NIC (2) (3) taken in tax NIC (2) (3) taken in tax net income NIC and CB NIC and CB (4) (4) pounds pounds pounds pounds per cent pounds pounds pounds per cent pounds per cent People with personal allowance and married couple's allowance (under 65) with 1 child 80 10.20 3.44 86.76 -8.5 10.40 3.64 90.36 -8.1 3.60 4.1 90 10.20 4.44 95.76 -6.4 10.40 4.98 99.47 -5.8 3.71 3.9 100 10.20 5.57 104.63 -4.6 10.40 8.11 106.79 -2.2 2.16 2.1 125 10.20 13.13 122.07 2.3 10.40 16.01 125.01 4.3 2.94 2.4 150 10.20 21.88 138.32 7.8 10.40 25.16 141.99 9.4 3.67 2.7 200 10.20 39.38 170.82 14.6 10.40 43.44 175.96 15.8 5.13 3.0 250 10.20 56.88 203.32 18.7 10.40 61.73 209.92 19.6 6.60 3.2 300 10.20 74.38 235.82 21.4 10.40 80.02 243.88 22.2 8.06 3.4 350 10.20 91.88 268.32 23.3 10.40 98.31 277.84 24.0 9.52 3.5 400 10.20 109.38 300.82 24.8 10.40 116.59 311.81 25.4 10.98 3.7 450 10.20 124.88 335.32 25.5 10.40 131.86 348.79 25.8 13.47 4.0 500 10.20 137.38 372.82 25.4 10.40 144.92 387.98 25.7 15.16 4.1 600 10.20 174.07 436.13 27.3 10.40 184.83 452.57 27.8 16.44 3.8 700 10.20 214.07 496.13 29.1 10.40 226.63 515.27 29.6 19.14 3.9 800 10.20 254.07 556.13 30.5 10.40 268.43 577.97 30.9 21.84 3.9 1,000 10.20 334.07 676.13 32.4 10.40 352.03 703.37 32.7 27.24 4.0 People with personal allowance and married couple's allowance (under 65) with 2 children 80 18.45 3.44 95.01 -18.8 18.85 3.64 98.81 -18.2 3.80 4.0 90 18.45 4.44 104.01 -15.6 18.85 4.98 107.92 -14.8 3.91 3.8 100 18.45 5.57 112.88 -12.9 18.85 8.11 115.24 -10.3 2.36 2.1 125 18.45 13.13 130.32 -4.3 18.85 16.01 133.46 -2.2 3.14 2.4 150 18.45 21.88 146.57 2.3 18.85 25.16 150.44 4.0 3.87 2.6 200 18.45 39.38 179.07 10.5 18.85 43.44 184.41 11.8 5.33 3.0 250 18.45 56.88 211.57 15.4 18.85 61.73 218.37 16.4 6.80 3.2 300 18.45 74.38 244.07 18.6 18.85 80.02 252.33 19.5 8.26 3.4 350 18.45 91.88 276.57 21.0 18.85 98.31 286.29 21.7 9.72 3.5 400 18.45 109.38 309.07 22.7 18.85 116.59 320.26 23.4 11.18 3.6 450 18.45 124.88 343.57 23.7 18.85 131.86 357.24 24.0 13.67 4.0 500 18.45 137.38 381.07 23.8 18.85 144.92 396.43 24.1 15.36 4.0 600 18.45 174.07 444.38 25.9 18.85 184.83 461.02 26.5 16.64 3.7 700 18.45 214.07 504.38 27.9 18.85 226.63 523.72 28.4 19.34 3.8 800 18.45 254.07 564.38 29.5 18.85 268.43 586.42 29.9 22.04 3.9 1,000 18.45 334.07 684.38 31.6 18.85 352.03 711.82 31.9 27.44 4.0 (1)It is assumed that all income is earned. (2)National Insurance Contributions are at the standard class 1 rate for employees not contracted-out of the State additional (earnings related) pension scheme. (3)Net income is earnings, less tax and National Insurance Contributions, plus child benefit. It does not include any income-related benefit. (4)A minus sign indicates that child benefit exceeds income tax and National Insurance Contributions.