Vol. 498 No. 4
255 Mr. Noonan asked the Minister for Finance the level of gross income at which a PAYE taxpayer will become liable for the higher rate of income tax in the 1999-2000 tax year for a single person and a married person with one spouse working; the equivalent 1998-9 figures; and if he will make a statement on the matter. [27207/98]
A single taxpayer will become liable for the higher rate of income tax at £14,000 in the 1999-2000 tax year, compared with £13,950 in the 1998-99 tax year. A married couple with one spouse working will become liable to the higher rate of income tax at £28,000 in the 1999-2000 tax year, compared with £27,100 in the 1998-99 tax year.
In my recent Budget Statement, I announced the standard rating of the basic single and married personal and PAYE allowances and a significant widening of the standard income tax band to offset the effect of standard rating these allowances for higher rate taxpayers. In addition, I announced a significant increase in the standard rate of personal allowance and PAYE allowance which effectively gives the same cash gain to all taxpayers regardless of their marginal rate of tax. A single PAYE worker will have standard rated personal and PAYE allowances of £5,200 per annum in the 1999-2000 tax year while a married couple with one spouse working will have standard rated allowances totalling £9,400 in the 1999-2000 tax year.
Deputies should note that, because the main personal allowances and the PAYE allowance are now standard rated, they will no longer count towards the threshold at which taxpayers become liable to the higher rate of tax. In future, the standard rated personal allowances and PAYE allowances will be deducted after tax is calculated rather than before the tax calculation as was the case up to now.
