Written Answers. - Income Tax Receipts.

Kathleen Lynch

Question:

30 Kathleen Lynch asked the Minister for Finance the percentage of the total tax take from the PAYE sector, farmers and other self-employed persons in 1995; and if he will make a statement on the matter. [8597/96]

The percentage of the combined income tax receipt in 1995 from the PAYE, farming and other self-employed sectors as contributed by each sector was 86.7 per cent from PAYE, 1.7 per cent from farmers and 11.6 per cent from other self-employed. These figures do not take account of receipts of deposit interest retention tax for which a breakdown between particular classes of taxpayers cannot be ascertained.

The figure for PAYE covers more than tax on wages and salaries. For example, tax paid by directors of close companies is included, as is the tax on other income of employees such as rent and other investment income. After adjusting for these factors, tax on wages and salaries normally represents about 68 per cent of the take from income tax, excluding deposit interest retention tax. The figure for PAYE also includes the tax paid on the income from employment of farmers and other self-employed individuals.

The figure for other self-employed includes tax paid on income from trades and professions other than farming, together with tax paid on other income such as rent and other investment income. It also includes withholding tax on professional fees. The yield in 1995 from this sector was reduced by approximately £52 million as a result of implementing a High Court ruling to the effect that withholding tax on professional fees should be allowable as a credit against income tax liability on a current year basis.

The percentage figures given must be seen in the context of the relative numbers of taxpayers in each of the sectors mentioned, which are estimated for the income tax year 1995-96 to be 864,000 in PAYE, 31,000 farmers and 94,000 other self-employed.