To ask Her Majesty’s Government, in the light of the latest revised forecast by the
International Monetary Fund for the British economy, whether the Chancellor of the
Exchequer still has confidence in its forecasting.
<p>Britain’s long term economic plan is working, boosting economic security for Britain’s
hardworking people. The economy is growing, the deficit has fallen by a third and
there are record levels of people in work. But the job is not done and the biggest
risk now to the recovery would be abandoning the plan that is delivering a brighter
economic future.</p><p> </p><p>The Government’s strategy is to restore the public
finances to a sustainable path and the UK is seen as a relative safe haven, with interest
rates remaining historically low helping keep interest payments down for households,
businesses and the taxpayer.</p><p>The IMF set out their latest forecasts in the October
2014<em> World Economic Outlook. </em>The publication recognises the Government’s
long term economic plan is working, that the UK is growing and leaving the crisis
behind. The IMF project the UK economy to be the fastest growing G7 economy in 2014,
at 3.2 per cent and 2.7 per cent in 2015. Furthermore, the IMF recognise that fiscal
consolidation undertaken during the past few years has built trust among financial
investors that current fiscal paths are sustainable.</p>
To ask Mr Chancellor of the Exchequer, with reference to the Answer of 20 February
2012, Official Report, column 643W, on tax allowance pensions, what proportion of
income tax relief on contributions accrued to, or is expected to accrue to, individuals
with an annual income of (a) up to £19,999, (b) between £20,000 and £44,999, (c) between
£45,000 and £74,999, (d) between £75,000 and £99,999, (e) between £100,000 and £149,999
and (f) over £150,000 in (i) 2010-11, (ii) 2011-12, (iii) 2012-13, (iv) 2013-14 and
(v) 2014-15.
<p>The proportion of the cost of income tax relief on pension contributions for the
given income ranges, and years, is provided in the table below.</p><p> </p><table><tbody><tr><td>
</td><td colspan="6"><p><strong>% of the cost of income tax relief on contributions</strong></p></td></tr><tr><td><p><strong>Income
bands</strong></p></td><td><p>2009-10</p></td><td><p>2010-11</p></td><td><p>2011-12</p></td><td><p>2012-13</p></td><td><p>2013-14</p></td><td><p>2014-15</p></td></tr><tr><td><p>Up
to £19,999</p></td><td><p>8%</p></td><td><p>6%</p></td><td><p>5%</p></td><td><p>6%</p></td><td><p>5%</p></td><td><p>5%</p></td></tr><tr><td><p>Between
£20,000 and £44,999</p></td><td><p>31%</p></td><td><p>32%</p></td><td><p>35%</p></td><td><p>37%</p></td><td><p>37%</p></td><td><p>36%</p></td></tr><tr><td><p>Between
£45,000 and £74,999</p></td><td><p>25%</p></td><td><p>26%</p></td><td><p>28%</p></td><td><p>32%</p></td><td><p>33%</p></td><td><p>34%</p></td></tr><tr><td><p>Between
£75,000 and £99,999</p></td><td><p>7%</p></td><td><p>8%</p></td><td><p>8%</p></td><td><p>10%</p></td><td><p>10%</p></td><td><p>10%</p></td></tr><tr><td><p>Between
£100,000 and £149,999</p></td><td><p>8%</p></td><td><p>9%</p></td><td><p>9%</p></td><td><p>7%</p></td><td><p>8%</p></td><td><p>8%</p></td></tr><tr><td><p>£150,000
or more</p></td><td><p>20%</p></td><td><p>18%</p></td><td><p>14%</p></td><td><p>8%</p></td><td><p>7%</p></td><td><p>7%</p></td></tr><tr><td><p>All</p></td><td><p>100%</p></td><td><p>100%</p></td><td><p>100%</p></td><td><p>100%</p></td><td><p>100%</p></td><td><p>100%</p></td></tr></tbody></table><p>
</p><p> </p><p> </p><p> </p><p> </p><p>Estimates are based on Surveys of Personal
Incomes with projections for 2012-13 onwards. Historical estimates have been updated
to take into account the latest outturn data and updated projections. Projected years
are subject to uncertainty.</p><p> </p><p> </p><p> </p><p>The effect of the reductions
in the Annual Allowance in 2011‑12 and Lifetime Allowance from 2012-13, as well as
further reductions in both allowances in 2014-15 are reflected in the table. These
restrictions mostly affect individuals with incomes over £150,000 hence the drop in
share of tax relief for these individuals in latter years.</p><p> </p><p> </p><p>Increases
in the Personal Allowance (from £6,475 in 2009-10 to £10,000 in 2014-15) cause a decline
in the share of income tax relief going to those in the “Up to £19,999” income band.
The higher personal allowance reduces the amount of income subject to tax for these
individuals, hence also reduces their share of tax relief.</p>
