Written question asked by Vincent Cable (Liberal Democrat) on Friday, 13 April 2007, in the House of Commons. It was due for an answer on Tuesday, 17 April 2007. It was answered by Baroness Primarolo (Labour) on Monday, 23 April 2007 on behalf of the Treasury.

Income Tax: Tax Thresholds

Question: (2) if he will estimate the revenue implications of increasing the personal tax free allowance to (a) £7,500, (b) £8,000, (c) £8,500, (d) £9,000, (e) £9,500 and (f) £10,000 in each year from 2007-08 to 2010-11; and if he will make a statement.

Answer

The information requested can be found in the following tables .

Taxpayers removed from income tax
Number: (£ million)
	Personal allowance
	7,500	8,000	8,500	9,000	9,500	10,000
2007-08	2.6	3.3	4.1	4.9	5.7	6.4
2008-09	2.3	2.9	3.4	3.9	4.6	5.4
2009-10	2.1	2.7	3.1	3.6	4.2	5.0
2010-11	2.0	2.5	3.0	3.4	3.9	4.6

Cost of increasing the personal allowance
(£ billion)
	Personal Allowance
	7,500	8,000	8,500	9,000	9,500	10,000
2007-08	13.9	17.0	20.1	23.1	26.0	28.8
2008-09	12.6	15.5	18.3	21.0	24.0	26.9
2009-10	11.9	14.8	17.6	20.4	23.3	26.3
2010-11	11.1	14.0	17.0	19.8	22.6	25.7

Personal allowances for people aged 65 and over have been aligned with the ordinary personal allowance when exceeded.The estimates are based on the 2004-05 survey of personal incomes projected forward against an indexed baseline which includes the reforms to simplify the income tax and National Insurance system announced at Budget 2007.The figures exclude any estimate of behavioral response to the tax change which could be significant given the scale of the change.

Secondary information

Type: Written question
Reference: 131842; 459 c986-7W
Session: 2006-07
Subjects: Income tax Tax allowances
Link: View this Written question on www.publications.parliament.uk

Income Tax: Tax Thresholds

Secondary information

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