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Written question asked by Lord Taylor of Warwick (Non-affiliated) on Wednesday, 30 November 2022, in the House of Lords. It was due for an answer on Wednesday, 14 December 2022. It was answered by Lord Harlech (Conservative) on Wednesday, 14 December 2022 on behalf of the Treasury.

Income Tax

Question

To ask His Majesty's Government what plans they have for the future of income tax for the next five financial years; and what assessment they have made of how state pensions will be affected by that tax.

Answer

At the Autumn Statement, the Government made the decision to keep the basic rate of income tax at 20 per cent, maintain income tax thresholds for a further 2 years until April 2028 and decrease the additional rate threshold to £125,140 from 6 April 2023.

The tax treatment of social security benefits is based on the type of payment and why it is provided. In general, benefits that are designed to replace income are taxable, including the State Pension.

The Personal Allowance is set at a level high enough to ensure that those pensioners whose sole income is the new State Pension or basic State Pension do not and, on current projections, will not pay any income tax in the next five financial years.

As with all aspects of the tax system, the Government will keep these policies under review and any decisions on future changes will be taken by the Chancellor in the context of the wider public finances.

Secondary information

Type
Written question
Reference
HL3922
Session
2022-23
Subjects
Income tax State retirement pensions
Link
View this Written question on www.parliament.uk