Vol. 441 No. 7
3 Mr. M. McDowell asked the Minister for Finance the gross and nett cost to the Exchequer for the period April to December 1994, and for a full year of reducing the standard rate of income tax to 25 per cent and the upper rate of tax to 44 per cent and 40 per cent respectively.
The only relevant information available as to cost is in relation to the direct costs to the Exchequer in income tax foregone if the changes referred to in the question were enacted in the income tax year 1994-95. Assuming the enactment of the changes proposed in this year's Finance Bill, the estimated costs to the Exchequer of the changes mentioned in the question are as follows:
Reduction of the standard rate of income tax to 25 per cent would cost £85 million in 1994 (April to December) and £143 million in full year.
Reduction in the top rate of income tax to 44 per cent would cost £75 million in 1994 (April to December) and £134 million in a full year.
Reduction of the top rate of tax to 40 per cent would cost £150 million in 1994 (April to December) and £268 million in a full year.
