§ 61 and 62. Sir C. KINLOCH-COOKEasked the Chancellor of the Exchequer (1) whether he is aware that, in existing circumstances, a man with a pension under £1 per week has to pay Income Tax upon that pension; and whether he will say if that is the intention of the Government; and (2) whether he is aware that a labourer earning £34 a quarter pays 9s. a quarter Income Tax, after giving credit for the abatement allowance, whereas a pensioner in receipt of £9 pension per quarter earning a similar sum for his labour, after giving credit for the abatement allowance, pays an Income Tax of £1 9s. 3d. a quarter; and can he see his way so to amend the Income Tax regulations as to exempt from the tax all pensions of £1 a week and under?
§ The FINANCIAL SECRETARY to the TREASURY (Mr. McKinnon Wood)Whether a pensioner is or is not required to pay Income Tax depends not upon the amount of his pension but upon the amount of his total income from all sources. Under the Income Tax Acts a total income not exceeding £130 per annum is exempt. Incomes exceeding £130 are chargeable to Income Tax subject to the statutory allowances for abatement, etc. In the cases taken by the hon. Member one taxpayer has an income of £34 per quarter and pays tax on £34, less £30 "abatement," namely, 9s. (£4 at 2s. 3d. in the £). The other has an income of £43 per quarter (wages £34, plus pension £9), and pays tax on £43, less £30 abatement, namely, £1 9s. 3d. (£13 at 2s. 3d. in the £). The law provides, not unreasonably, that the taxpayer enjoying the larger income should pay the larger amount of tax.
§ Sir C. KINLOCH-COOKEWill the right hon. Gentleman answer the question: Will the Government tax pensions when those pensions are pensions of £1 per week?
§ Mr. McKINNON WOODThat depends on what the other income of the man is.