Taxation: Income Tax Threshold

Lord Lexden Excerpts

Wednesday 16th March 2016 Lords Chamber

[Lord O’Neill of Gatley]

My Lords, I plan to make some longer comments specifically about this sensitive issue next week when I open the debate on the Budget. There are some very important complexities behind the policies which, frankly, were misunderstood in the way they were reported at the weekend.

[Lord Lexden (Con)]

My Lords, the second part of my noble friend’s original Question asked,

“how many people have been affected”,

by raising these tax thresholds. Can my noble friend give us the figures to show the extent to which people have benefited from the changes?

[Lord O’Neill of Gatley]

My Lords, as a result of the changes announced in the Budget today and in the summer Budget 2015, 31 million individuals will see their income tax bill reduced in 2017-18. This is close to an additional 1 million whose income tax has been reduced as a result of the previously announced measures. A typical base-rate taxpayer is going to pay notably less—just over £1,000 less tax in 2017-18 than back in 2010-11—while a typical high-rate taxpayer will pay more than £1,100 less than would otherwise have been the case. Let me add that this is the first time that there has not been an even stronger benefit for the lowest-income earners over the whole of that period.