Written Answers. - Income Tax.
Máirín Quill
Question:
23
Miss Quill
asked the
Minister for Finance
the portion of income taken in income tax, levies and PRSI at 5 per cent from a self-employed single mother with an ordinary personal allowance and with a taxable income of £8,000, £10,000, £12,000, £14,000 or £16,000; the figures for single PAYE workers on the same taxable incomes; if he will make a statement on the cost of making the PAYE tax allowance available to lower paid self-employed taxpayers; and if he will make a statement on the matter.
[24165/96]
Helen Keogh
Question:
29
Ms Keogh
asked the
Minister for Finance
the portion of income taken in income tax, levies and PRSI at 5 per cent from a self-employed single mother with an ordinary personal allowance and with a taxable income of £8,000, £10,000, £12,000, £14,000 or £16,000; the figures for single PAYE workers on the same taxable incomes; if he will make a statement on the cost of making the PAYE tax allowance available to lower paid self-employed taxpayers; and if he will make a statement on the matter.
[24166/96]
I propose to take Questions Nos. 23 and 29 together.
The information requested by the Deputies in the first part of the question is set out in the following table.
The PAYE allowance, currently £800, is available to ordinary employees. It is not available to the self-employed — including farmers — proprietary directors, or the spouses of those two groups when employed in the business. The 1994 Finance Act extended the PAYE allowance to children of the self-employed — including farmers — and of proprietary directors who are genuinely employed in their parent's business.
If the PAYE allowance was to be extended to those groups at present not entitled to the allowance, it could not be confined only to those deemed to be the lower paid, but would have to be extended to all taxpayers within those groups. I am informed by the Revenue Commissioners that the estimated full year cost to the Exchequer of extending the PAYE allowance to the self-employed and proprietary directors would be between £42 million and £65 million, depending on the likelihood of additional spouses assisting in the family business solely to avail of the PAYE allowance.
Total Tax Deductions as a portion of Gross Income of a single parent at various income levels
|
Gross Income¹
|
£8,000
|
£10,000
|
£12,000
|
£14,000
|
£16,000
|
|
Schedule D
|
|
|
|
|
|
|
Total Deductions²
|
£1,077
|
£1,942
|
£2,627
|
£3,312
|
£4,270
|
|
as a % of Gross Income
|
13.46%
|
19.42%
|
21.89%
|
23.66%
|
26.69%
|
|
PAYE³
|
|
|
|
|
|
|
Total Deduction²
|
£724.20
|
£1,599.20
|
£2,294.20
|
£2,989.20
|
£3,789.20
|
|
as a % of Gross Income
|
9.05%
|
15.99%
|
19.12%
|
21.35%
|
23.68%
|
Note:
1. Taxable income as referred to by the Deputies is taken to mean gross income.
2. Total deductions include income tax, employee PRSI, health contribution and employment and training levy where appropriate. It is assumed that both taxpayers are single parents, with one child, and each receives the lone parent's tax free allowance.
3. The PAYE taxpayer is assumed to be a full rate PRSI contributor.
4. No account is taken of the social welfare lone parent's allowance. This allowance is means-tested and the level of payment therefore depends on individual circumstances including, for example, child minding expenses. It should be noted, however, that a self-employed single parent in receipt of this payment qualifies for the PAYE allowance. Furthermore, recipients of this Social Welfare payment are exempted from the health contribution and the employment and training levy on all their income.
