§ 23. Mr. Ridley
asked the Chancellor of the Exchequer what Income Tax is paid by three retired couples whose gross incomes, consisting only of National Insurance and other pensions, are £520, £560, and £600 per annum, respectively.
§ The Financial Secretary to the Treasury (Mr. Alan Green)
None; not more than £18; and not more than £34, assuming of course one or other of them has reached the age of 65.
§ Mr. Ridley
Does not my hon. Friend think that it is a regressive form of taxation which takes £34 out of a slice of £80 at this level of income? Without asking him to anticipate his right hon. Friend's Budget statement, may I ask him to have another look at this?
§ 28. Mr. Oram
asked the Chancellor of the Exchequer if he is aware that errors and misunderstandings about their liability for Income Tax frequently arise in the case of people retiring from work, particularly in the first year and if they take up part-time work; and if he will issue instructions to officers of the Inland Revenue to be careful in making explanations to such people so as to avoid unnecessary anxiety for them.
§ Mr. Oram
Is the hon. Gentleman aware that I personally have come across four or five such cases in my constituency in recent weeks—some errors on the part of the Inland Revenue and others a lack of suitable explanation of the situation? Cannot something be done to make sure that these misunderstandings do not arise?
§ Mr. Green
The hon. Member has been in correspondence with me about this. When there has been a mistake on the part of the Inland Revenue, it is very much regretted and, I hope, proper steps are taken to put it right. Notes accompany Income Tax returns and draw the attention of pensioners to the need to inform the tax office when they become entitled to receive a pension. However, if I can find other means to make the situation even clearer, I will willingly adopt them.
Mr. J. T. Price
Since this genuine grievance has been drawn to the attention of the Chancellor of the Exchequer, would not the simplest way of dealing with it be to apply to it the remedy applied to the legal profession and the judiciary—that the last year's earnings before retirement are entirely tax-free, one of the most munificent benefactions which the House has ever bestowed on any part of the British electorate? Will the Government consider applying a similar principle to ordinary people who are being mulcted of tax which they ought not to pay?