Mortgage Arrears Proposals

Questions (61, 62, 89, 90, 97, 98, 104)

Ann Phelan

Question:

61. Deputy Ann Phelan asked the Minister for Finance if he will indicate the location of the letters demanding voluntary surrender and sale categorised in the Department of Finance and Central Bank mortgage arrears statistical reports; and if he will make a statement on the matter. [12128/14]

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Ann Phelan

Question:

62. Deputy Ann Phelan asked the Minister for Finance if he has confidence in the figures regarding repossessions in the view of the banks without audit and without the banks' own quality control; his views on whether it is fair and right for the Irish people to accept data from these sources in view of the history of the same institutions; and if he will make a statement on the matter. [12129/14]

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Michael McGrath

Question:

89. Deputy Michael McGrath asked the Minister for Finance the impact of the sale of mortgages to entities not regulated by the Central Bank of Ireland on the mortgage arrears figures produced by the Central Bank of Ireland; and if he will make a statement on the matter. [11818/14]

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Michael McGrath

Question:

90. Deputy Michael McGrath asked the Minister for Finance if a mortgaged property that is in the hands of a receiver is no longer recorded in the quarterly mortgage arrears statistics produced by the Central Bank of Ireland; and if he will make a statement on the matter. [11819/14]

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Michael McGrath

Question:

97. Deputy Michael McGrath asked the Minister for Finance the number of residential mortgages held by Irish banks that have been securitised; and if he will make a statement on the matter. [11942/14]

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Michael McGrath

Question:

98. Deputy Michael McGrath asked the Minister for Finance if a financial institution is obliged to advise a mortgage holder whose loan it has sold by means of securitisation; and if he will make a statement on the matter. [11943/14]

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Pearse Doherty

Question:

104. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank is excluding mortgages which have been packaged and sold by banks to other banking, loan or financing agencies from its statistical analysis of mortgage arrears; and if so, the reason it is doing this and his views that this would not reflect fairly on the number of actual mortgages in distress. [12031/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 61, 62, 89, 90, 97, 98 and 104 together.

The Central Bank's latest 'Residential Mortgage Arrears and Repossessions Statistics' publication for the end of Q4 2013, shows that the number of mortgage accounts for principal dwelling houses (PDH) in arrears, fell for the second consecutive quarter. A total of 136,564 of accounts were in arrears at end December 2013, a decline of 3.3 per cent relative to end Q3 and that, for primary dwelling mortgage accounts of more than 90 days in arrears, there was a decline of 2.3% over the quarter.  The publication states that the size of the decline was impacted by asset sales over the quarter but the Central Bank has also advised that this does not change the overall arrears trends.

The Central Bank accepts that some mortgages are sold to unregulated entities and it has informed me that it is taking steps to address the impact of these loans on its mortgage statistics.  However the Central Bank has also advised that for confidentiality reasons, it is precluded from giving more information on the issue of loan transfers. It is aware of the impact of asset transfers on overall trends and it is putting measures in place to address this, while safeguarding confidentiality.

Regarding the issue of securitised mortgages, the Central Bank has informed me that mortgage loans that have been securitised are included in its published mortgage arrears statistics published by the Central Bank.  While it does not publish information on the number of mortgage accounts that have been securitised, the Central Bank has informed me that the outstanding balance on securitised mortgages is available on the Central Bank website in Table A.18.2 at the following location: http://www.centralbank.ie/polstats/stats/cmab/Pages/HouseholdCredit.aspx.

The Central Bank has also advised that while it issued a voluntary code of practice in 1991 on the transfer of mortgages, there is no Central Bank requirement, or legislative obligation with respect to which the Central Bank has a role in supervising compliance on a lender to provide notice on the assignment of a loan.  In respect of a mortgage account for which a receiver has been appointed, these are included in the quarterly Central Bank mortgage statistics publication.  In this regard, it should be noted that the latest data published by my Department for the 6 banks covered by the Mortgage Arrears Resolution Targets (MART) shows that at the end of December 2013 those lenders had over 3,100 rent receivers in place. Regarding letters issued by mortgage lenders demanding surrender or sale, data on this particular aspect are not specifically included in the quarterly statistics published by the Central Bank or by my Department.  However, information on this general area is put into the public domain when the Central Bank reports on progress regarding its MART targets.

Overall, the Central Bank is committed to the quality criteria outlined in the ECB Public Commitment on European Statistics for all statistics published, including the Residential Mortgage Arrears and Repossessions Statistics. The Mortgage Arrears return was developed following individual and collective discussions with reporting institutions, and agreement on definitions and coverage. While the data is not audited independently, the Central Bank undertakes extensive validation and consistency checks.  While this is an area that can always be kept under review, I am satisfied that the mortgage data as published is robust and of good quality.

Banking Sector Staff

Questions (63)

Ann Phelan

Question:

63. Deputy Ann Phelan asked the Minister for Finance if he will provide data on the banks that incentivise their mortgage arrears staff; the way these bonuses are calculated and paid; and if he will make a statement on the matter. [12130/14]

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Written answers (Question to Finance)

As the Deputy will be aware, this Government's policy with respect to banking remuneration has been in place since mid-2011. In summary, remuneration in State supported banks is capped at €500,000 (excluding normal pension entitlements) and the payment of bonuses in any form is not permitted. Within these policy confines, it is a matter for the Boards and Management of the various State supported institutions to decide how to remunerate and incentivise their staff who work in the area of mortgage arrears and indeed their staff more generally. Further details in relation to the remuneration structures and profiles at the State supported banks can be found in the "Mercer Report" which is available on my Department's website.

NAMA Portfolio

Questions (64)

Stephen Donnelly

Question:

64. Deputy Stephen S. Donnelly asked the Minister for Finance the number of housing units sold by the National Asset Management Agency since its inception for social housing in Northern Ireland; and if he will make a statement on the matter. [11607/14]

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Written answers (Question to Finance)

NAMA does not own any residential properties in Northern Ireland and, consequently, is not engaged in the direct sale of such properties, whether for social housing or other purposes.  Where residential property is held as security for debts owed to NAMA it is legally owned by debtors.  The number of units held as security is less than 1,000. The sale of such property is conducted by debtors or, in the case of enforcement, on their behalf by duly appointed Receivers/Administrators. 

In its role as a secured lender, NAMA facilitates engagement between its debtors/receivers and local authorities and approved housing bodies in Northern Ireland around the purchase and long-term leasing of residential property for social housing provision.  This has facilitated transactions including:

- The sale of a site in Newcastle to North West Housing Association

- The sale of 20 apartments at Throne View, Belfast to Oaklee Housing Association

- The sale of 31 apartments at King Street, Belfast to Oaklee Housing Association

- The sale of 6 apartments in Bangor to Fold Housing Association

- Option to Clanmill Housing Association in relation to the Hilden Mill site, near Lisburn

NAMA is working with the Northern Ireland Federation of Housing Associations and its members to assist, in the way described, delivery of the Social Housing Development Programme in Northern Ireland.

NAMA Operations

Questions (65, 66)

Stephen Donnelly

Question:

65. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Questions Nos. 212 and 213 of 18 February 2014, if he will confirm the amount of advances approved by the National Asset Management Agency to be spent in Northern Ireland, for the two periods inception to May 2012 and inception to date; and if he will make a statement on the matter. [11608/14]

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Stephen Donnelly

Question:

66. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Questions Nos. 212 and 213 of 18 February 2014, if he will confirm the amount of advances approved by the National Asset Management Agency in respect of Northern Ireland borrowers for the two periods inception to May 2012 and inception to date; and if he will make a statement on the matter. [11609/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 65 and 66 together.

I am advised that NAMA has, since inception, approved €160m in new advances to Northern Ireland debtors; €55m had been approved to May 2012. As per my response of 18 February 2014 to Parliamentary Questions Nos. 212 and 213, 1% of the May 2012 total and 2% of the total to December 2013 were drawn down in Northern Ireland.

NAMA Operations

Questions (67)

Stephen Donnelly

Question:

67. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question No. 211 of 18 February 2014, if he will confirm that the National Asset Management Agency has foreclosed on 19 debtor connections in Northern Ireland out of a total of 180 such connections; if he will confirm that elsewhere, NAMA has foreclosed on 261 debtor connections out of a total of 670 such connections; if he agrees with the NAMA assessment of this as proportionate; and if he will make a statement on the matter. [11610/14]

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Written answers (Question to Finance)

As the enforcement process may apply to part of a debtor connection but not necessarily all of it, a useful measure of NAMA enforcement activity is the number of properties or groups or properties which have been enforced.  NAMA advises it has taken enforcement action in respect to 2,209 properties or groups of properties, all of which are listed on the NAMA website, www.nama.ie. Some 1,998 or 90% of these properties are located in the Republic of Ireland, and 130 or 6% are in Northern Ireland. NAMA advises that it only takes enforcement action as a last resort and it is often in cases where a debtor has failed to cooperate or engage with them. The overall level of enforcement in the portfolio is 29% of loan value at year end 2013 which is not high given they inherited a distressed portfolio from the financial institutions.  I agree with NAMA's assessment that its enforcement in Northern Ireland is proportionate to the scale of its exposure to Northern Ireland debtors and properties and in line with the approach adopted in other jurisdictions in which it operates.

NAMA Operations

Questions (68)

Stephen Donnelly

Question:

68. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide in tabular form the names of the members of the National Asset Management Agency board along with the date on which their term of office will expire; and if he will make a statement on the matter. [11611/14]

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Written answers (Question to Finance)

The details of the NAMA Board are as follows. My officials are currently in the process of examining the issue of Board vacancies. 

Name

Ends

Brendan McDonagh

Ex-Officio

John Corrigan

Ex- Officio

Frank Daly (Chairman)

Dec 2014

Brian McEnery

Dec 2018

Willie Soffe

Dec 2018

Oliver Ellingham

April 2018

NAMA Operations

Questions (69)

Stephen Donnelly

Question:

69. Deputy Stephen S. Donnelly asked the Minister for Finance if he will confirm the date upon which a person (details supplied) ceased to be a member of the board of the National Asset Management Agency; the date on which NAMA first knew that this person would be ceasing to be a member of the board; and if he will make a statement on the matter. [11612/14]

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Written answers (Question to Finance)

The Board Member in questions was appointed to the Board in May 2010 for a period of three years and his term ended in May 2013. NAMA became aware that he would cease to be a Board Member in April 2013.

NAMA Operations

Questions (70)

Stephen Donnelly

Question:

70. Deputy Stephen S. Donnelly asked the Minister for Finance the reason he has failed to advertise vacant roles on the board of the National Asset Management Agency. [11613/14]

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Written answers (Question to Finance)

As the Deputy may be aware my Department has previously advertised seeking expressions of interest from suitably qualified people for appointment to the NAMA board. In 2012, my officials sought expressions of interest for appointment to the NAMA Board. 24 expressions of interest were received in this process. However, it should be noted that under the Government arrangements Ministers are not confined to those who make expressions of interest, as long as all appointees are relevantly qualified. When making appointments to the board I consider all candidates who I feel have the relevant expertise and experience to contribute to the Board.

Departmental Legal Costs

Questions (71, 72)

Stephen Donnelly

Question:

71. Deputy Stephen S. Donnelly asked the Minister for Finance if he will confirm the cost, to date, to the State of defending the promissory note challenge by Deputy Joan Collins in the High Court. [11614/14]

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Stephen Donnelly

Question:

72. Deputy Stephen S. Donnelly asked the Minister for Finance if he will confirm the cost, to date, to the State of defending the promissory note challenge by Mr. David Hall in the High Court. [11615/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 71 and 72 together.

The Office of the Chief State Solicitor represented the Minister for Finance in the proceedings Joan Collins V Minister for Finance, Ireland and the Attorney General. Consequently there were no external solicitor costs associated with these proceedings. Fees incurred by the State to date in these proceedings, which relate to counsels' fees and expert witness costs, total €251,985.49. As the Deputy may be aware, an order for 75% of the costs of the proceedings was awarded in favour of the plaintiff, however, these costs have not yet been quantified. It is therefore too early to establish what the overall cost to the State in defending the proceedings will be.

Similarly, in the case of the David Hall proceedings the Office of the Chief State Solicitor also represented the Minister for Finance and counsels' fees incurred in those proceedings totalled €111,938.26. As these proceedings have been appealed to the Supreme Court the High Court orders for costs have been stayed. It is therefore too early to establish what the overall cost to the State in defending the proceedings will be. Given the findings of the High Court it is clear that the State has been entirely vindicated in its decision to defend both sets of proceedings.

NAMA Operations

Questions (73)

Stephen Donnelly

Question:

73. Deputy Stephen S. Donnelly asked the Minister for Finance following publication of the Geoghegan report in 2011 which recommended the National Asset Management Agency’s board be strengthened with commercial expertise when it recommended the board needs to be comprised of different skills and it needs to balance its current control features with those of entrepreneurial skills, ideally within the property industry or, if this is not possible, within other industries, if he will confirm the way he is dealing with this recommendation when considering future appointments to the board. [11616/14]

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Written answers (Question to Finance)

There are a number of factors taken into account when considering appointing members to the Board of NAMA. These include the recommendations of the Geoghegan Report as well as evidence of considerable experience of a high quality and high level of responsibility in one or more of the fields listed in Section 19(2) of the NAMA Act 2009, experience in a senior position (e.g. CEO or senior manager of a substantial company or public organisation), an understanding of management of complex organisations and an absence of any conflicts of interest. When making appointments to the board I consider all candidates who I feel have the relevant expertise and experience to contribute to the Board.

Revenue Commissioners Expenditure

Question No. 75 answered with Question No. 55.

Questions (74)

Arthur Spring

Question:

74. Deputy Arthur Spring asked the Minister for Finance his plans to introduce new technology to prevent counterfeiting of security features of Revenue stamps on products such as cigarettes; when the provision of such services will be put to tender again; and if he will make a statement on the matter. [11629/14]

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Written answers (Question to Finance)

I am advised by the Revenue Commissioners that the tax stamp contains a range of security features to prevent counterfeiting and these features are kept under review and ungraded as required. In 2009, the technical specification for tax stamps was significantly upgraded and the stamp was further enhanced in 2011.  The Revenue Commissioners advise me that the stamp has proven to be very robust and they have had no evidence to date that it is being copied.  The current contract to design and print the tobacco stamp expires at the end August 2014. The tendering process for a new contract has commenced and is being handled through the Office of Government Procurement.

Question No. 75 answered with Question No. 55.

Banking Operations

Questions (76)

Noel Grealish

Question:

76. Deputy Noel Grealish asked the Minister for Finance if it is time to review the relationship framework with financial institutions in which mortgage holders as taxpayers have a shareholding; and if he will make a statement on the matter. [11638/14]

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Written answers (Question to Finance)

The Relationship Frameworks provide safeguards as to the separate management of each of the State's shareholdings in Irish credit institutions  in order to ensure that those interests, and the management of those interests, do not lead to a prevention, restriction or distortion of competition in contravention of merger control or competition law.  

In both the Relationship Frameworks with AIB and Permanent TSB, it is recognised that the banks remain a separate economic unit with independent powers of decision and that their Board and management teams retain responsibility and authority for determining strategy and commercial policies and conducting their day-to-day operations. However under Clause 11 of each of frameworks, both banks would be obliged to consult with me if they were proposing a disposal of a loan/loans for an amount in excess of €100 million and €50 million respectively.  Should I be consulted on the sale of mortgage loans in the future I would carefully consider the matter based on the facts including the impact on profit, capital and funding in AIB and Permanent TSB respectively. I have no current intentions to review or ammend the Relationship Frameworks.

Mortgage Arrears Proposals

Questions (77, 102)

John Browne

Question:

77. Deputy John Browne asked the Minister for Finance in view of the fact that mortgage arrears issues are presumed to be dealt with on a case by case basis, if special consideration should be given to those who bought property at the peak of the property cycle as these are the most likely to have seriously unsustainable mortgages; and if he will make a statement on the matter. [11645/14]

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Ann Phelan

Question:

102. Deputy Ann Phelan asked the Minister for Finance if consideration has been given to the application of the Iceland model for addressing mortgage distress, whereby mortgages are reset to 110% of current values; and if he will make a statement on the matter. [11986/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 77 and 102 together.

The fair resolution of the mortgage arrears problem is a key priority for Government.  The Government has developed a comprehensive strategy, in line with the main recommendations of the 2011 Keane Report, and has significantly advanced a number of key measures in this regard, including:

1. An intensification by the Central Bank of its engagement with mortgage lenders to require them, under the Mortgage Arrears Resolution Targets (MART) process, to propose and conclude sustainable and durable alternative arrangements to their customers in mortgage arrears. Targets have, so far, been set for the period to end of June 2014 and by this date the relevant banks covered by the MART process will be required to have proposed sustainable solutions to 75% of mortgages which are more than 90 days in arrears and to have concluded solutions with 35% of such mortgages.

2. Significant reforms to personal insolvency and the establishment of the Insolvency Service of Ireland, to provide more accessible and flexible statutory frameworks for people with unsustainable personal and mortgage debt to address their position.

3. Updating the Code of Conduct on Mortgage Arrears to provide additional safeguards to cooperating borrowers while also promoting and encouraging efforts by both lenders and borrowers to meaningfully address mortgage arrears or pre-arrears.

4. Mortgage to rent which is now available as a social housing response to allow people to remain in their house, where possible; and

5. The provision of an independent mortgage information and advice service.

While the main focus has been on people experiencing genuine difficulty with their mortgage as opposed to those currently experiencing a negative equity situation, the Government is fully committed to helping address the affordability constraints faced by those mortgage holders that bought homes at the height of the property boom between 2004 and 2008. In this regard, I have fulfilled the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period.  First time buyers now qualify for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period. The rate of tax relief on the interest paid on such loans is, for the tax years 2012 to 2017, now 30 per cent.  A document which illustrates the maximum gains for such individuals is available on the Department of Finance's tax policy website at http://taxpolicy.gov.ie/wp-content/uploads/2011/12/Mortgage-Interest-Relief.pdf.

It is considered that the necessary framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebted situations.  However, early and effective engagement between borrowers and lenders is key to resolving the cases of mortgage difficulty.  Where there is effective and meaningful engagement by all parties regarding a mortgage difficulty, the Central Bank's mortgage arrears and restructures statisics and my Department's monthly mortgage data publications shows that an increasing number of durable long term mortgage restructures are being put in place.  However, it is accepted that it will be necessary for lenders and borrowers to continue to build on this.

In relation to the efforts by Iceland to address mortgage debt, I understand that action is still ongoing in this regard and it is unclear how successful the previous efforts on mortgage principal modification have been.  The Deputy may wish to to note that the Icelandic Government as recently as last November announced further measures to address the mortgage and indebtedness situation in the country.

IBRC Loans

Questions (78, 79)

Pearse Doherty

Question:

78. Deputy Pearse Doherty asked the Minister for Finance if a person (details supplied) refinanced their €300 million loan at the Irish Bank Resolution Corporation at par value of 100% or if the full value entailed a refinancing at 97%, to allow for the cost of refinancing. [11662/14]

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Pearse Doherty

Question:

79. Deputy Pearse Doherty asked the Minister for Finance if any persons or companies have been allowed to buy back their loans from Irish Bank Resolution Corporation at a discount to allow for the cost of refinancing. [11663/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 78 and 79 together.

I have been advised by the Special Liquidators that the requested information is commercially sensitive and that they will not be commenting on individual customer-related transactions. The Special Liquidators have confirmed that there are 33 Borrower Groups, representing 0.2% of total Borrower Groups in Irish Bank Resolution Corporation Limited in Special Liquidation, that were or are being offered for sale on a standalone bases. No IBRC Borrower is being provided with an exclusive opportunity to buy back their loans at a discount. A Borrower will only successfully be in a position to buy back their loans if they have provided an offer that is over and above the independent valuation obtained by the Special Liquidators and if their offer is over and above offers received from third parties.

Tax Code

Questions (80, 81)

Joe Higgins

Question:

80. Deputy Joe Higgins asked the Minister for Finance the number of PAYE workers that would not directly benefit from a raising of the level at which the top rate of income tax is raised. [11683/14]

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Joe Higgins

Question:

81. Deputy Joe Higgins asked the Minister for Finance the number of PAYE workers that would benefit from the raising of the level at which they pay income tax at the top rate by €1,000 per annum, €2,000 per annum, €3,000 per annum, €4,000 per annum and €5,000 per annum; and the amount such a reduction in income tax at each of these levels would cost the Exchequer. [11684/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 80 and 81 together.

I assume that the Deputy refers to an extension of the standard rate income tax band, which would apply similarly to single and widowed persons, as well as to single person child carers. The proposed extension to the standard rate band is assumed to also apply to married couples and civil partnerships. On this basis, I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of increasing the standard rate tax band to the PAYE sector by €1,000, €2,000, €3,000, €4,000 and €5,000, while also maintaining the current monetary differences between the single persons standard rate band and the various other classes of tax bands, is as follows:  

Proposed Increase

Estimated Cost - €m

€1,000

140

€2,000

290

€3,000

430                    

€4,000

580

€5,000

720

 It should be noted that the actual cost for each €1,000 increase may differ from the estimates above as it would be very much dependant on the numbers of taxpayers who are positioned in the income brackets where band increases would take effect and these can vary. With each of the proposed increases, the taxpayers affected are those currently paying income tax at the higher rate, of which there are 352,300 in the PAYE sector.

There are approximately 780,300 PAYE taxpayers in employment who are exempt from income tax and 840,200 PAYE taxpayers paying at the standard rate only. These taxpayers would not be impacted by raising the level at which the top rate of income tax is applied.

These figures are estimates for 2014, using the latest actual data for the year 2011 adjusted as necessary for income and employment trends in the interim. They are provisional and may be revised. A married couple or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit.