DIRT at 20 per cent or 24 per cent is the collection mechanism by which tax is withheld at source on deposit interest and in all cases is a final liability tax on such interest income. The yield from DIRT net of refunds, was £148 million in 1997 and is an important source of Exchequer revenue. I have no plans to cut the rate of DIRT on interest income in the circumstances of falling interest rates. Naturally any further cuts in the standard rate of income tax, now 24 per cent, will be reflected in the standard rate of DIRT.
Regarding the situation of the elderly in relation to DIRT, the over-65's are one of only two categories of individuals entitled to a refund of DIRT paid if their income is below the income tax exemption thresholds. Concessionary treatment is, therefore, afforded to the elderly in the administration of DIRT where their incomes fall outside the tax net. It is a general principle of taxation that as far as possible income from all sources should be subjected to taxation.
DIRT receipts for 1986 to 1997 are set out below for each calendar year.