Income Tax: Tax Rates and Bands
(asked on 10th October 2014) - View Source
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what the yield was of the top rate of income tax for each fiscal year from the introduction of the top rate of 45 per cent in 1988 to its abolition in 2010.
i, ii and iii. The estimated impact of the additional rate on tax liabilities is set out in Chapter 5 of the HM Revenue and Customs report “The Exchequer effect of the 50 per cent additional rate of income tax”. This report sets out the latest estimates of the taxable income elasticity, and the forestalling and other behavioural effects. It is available at:
iv. In 1988 the top rate of income tax was reduced from 60 per cent to 40 per cent (the ‘higher rate’). The table below details the tax liabilities for higher rate payers from 1997/98 to 2009/10. Comparable figures are not available for the previous years.
Tax Year | Tax Liability after Deductions £million |
1997/1998 | 32,900 |
1998/1999 | 38,590 |
1999/2000 | 45,700 |
2000/2001 | 54,000 |
2001/2002 | 56,400 |
2002/2003 | 57,000 |
2003/2004 | 57,100 |
2004/2005 | 65,200 |
2005/2006 | 76,400 |
2006/2007 | 84,300 |
2007/2008 | 93,200 |
2008/2009 | 89,700 |
2009/2010 | 82,800 |
v. Current and previous estimates of revenue from the 50% income tax rate can be found in the Office of Budget Responsibility’s March 2012 Economic Fiscal Outlook report, “Box 4.2: The additional rate of income tax”.
£ billion | |||||||
Outturn | Forecast | ||||||
Liabilities Basis | 2009-10 | 2010-11 | 2011-12 | 2012-13 | 2013-14 | 2014-15 | 2015-16 |
Underlying Impact of 50p rate: Original Estimate OBR estimate June 2010 (TIE=0.35) | 0.0 | 2.5 | 2.5 | 2.7 | 2.9 | 3.2 | 3.5 |
Current Costing1 | 0.0 | 0.7 | 0.6 | 0.6 | 0.7 | 0.7 | 0.8 |
Difference | 0.0 | -1.8 | -1.9 | -2.1 | -2.2 | -2.5 | -2.7 |
1 Based on the current estimates cost of reduction in the rate from 50% to 40%
vi. Chart 5.1 of the HMRC Report details the number of taxpayers with incomes above £150,000 for the years 2000/01 to 2010/11 (see link above).
The estimated number of taxpayers liable to the additional rate of income tax for more recent years is published in the HMRC National Statistics table 2.1 available at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/306826/Table_2.1.pdf
vii. Estimates of income tax liabilities by income range are published in the HMRC National Statistics table 2.5 available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/306857/Table_2.5.pdf
Shares of income tax liabilities by percentile group are available in table 2.4 at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/306831/Table_2.4.pdf
These estimates are based on the Survey of Personal Incomes (SPI) outturn data up to 2011-12, and then projected to 2013-14 in line with the Office for Budget Responsibility's latest economic and fiscal outlook.