HC Deb 27 April 1944 vol 399 cc926-7
42. Mr. Riley

asked the Chancellor of the Exchequer whether the basic pension of 10s. received by contributory pensioners who are working for wages is taken into account in computing the liability of the pensioner to the payment of Income Tax under the new Pay-as-you-earn scheme.

Sir J. Anderson

Yes, Sir; these pensions are liable to tax, and the introduction of Pay-as-you-earn makes no difference to the position in this respect. The usual practice is to take account of the pension in fixing the code number for the purposes of deduction of tax from the wages.

Mr. Riley

Is the right hon. Gentleman aware that there is a sense of widespread grievance amongst these pensioners who are making a contribution to the war by working, that their pension should be liable to Income Tax? Cannot he do something in the Finance Bill to obviate this?

Sir J. Anderson

I am afraid that many classes of taxpayers suffer from a sense of grievance at having to pay Income Tax. The question is simply whether the money received is or is not income; if it is income, it is subject to tax.

43. Mr. Riley

asked the Chancellor of the Exchequer whether a money grant, however small, given to a member of His Majesty's Forces as part of a V.C. award, is taken into account in the computation of liability to Income Tax.

Sir J. Anderson

A pension granted in respect of an award of the Victoria Cross is liable to Income Tax, in accordance with the general rule applying to payments from public funds. The amount of tax, if any, payable in a particular case would, of course, depend on the total income of the pensioner and the Income Tax allowances which he could claim.

Mr. Riley

Does the right hon. Gentleman appreciate the sense of grievance of these persons who have a V.C. award of £10, from which £2 18s. 6d. is deducted for Income Tax purposes?

Sir J. Anderson

What is deducted depends, of course, on the total income of the pensioner and on his circumstances. I really do not think that we ought to go on considering special exemptions in particular cases.