To ask Mr Chancellor of the Exchequer, how much has accrued to the public purse through the removal of personal allowances for annual incomes in excess of £100,000 in each of the last three years.
25 January 2017
The taper of the Personal Allowance for those earning above £100,000 is estimated to have accrued £2.7 billion in income tax in 2015-16, £2.4 billion in 2014-15 and £2.2 billion in 2013-14. Changes to the tax system affecting high income individuals involve significant behavioural responses which can impact revenues from such measures.
The Personal Allowance taper was introduced by the last Labour government. While the Government recognises that this feature of the income tax system can cause high marginal tax rates, the continued pressure on the public finances mean that the Government has been unable to remove it to date.
The estimates in this response are based on the 2013-14 Survey of Personal Incomes, projected to 2015-16 using economic assumptions consistent with the Office for Budget Responsibility’s November 2016 Economic and Fiscal Outlook.