Robert Halfon – 2014 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Robert Halfon on 2014-04-25.

To ask Mr Chancellor of the Exchequer, if he will estimate the potential cost to the public purse of raising the income tax personal allowance for 2015-16 from £10,500 to £12,300 with the same maximum cash benefit going to basic and higher rate taxpayers but no benefit going to additional rate taxpayers.

Mr David Gauke

Raising the income tax personal allowance to £12,300 in 2015-16 is estimated to cost in the region of £9.5 billion.

A reduction to the basic rate limit has been assumed so that the higher rate threshold is unchanged. As a result of this, basic rate and most higher rate taxpayers would benefit equally from the personal allowance increase.

This estimate is based on the 2011-12 Survey of Personal Incomes, projected to 2015-16 using economic assumptions consistent with the Office for Budget Responsibility’s March 2014 economic and fiscal outlook.