§ 26. Mr. Marksasked the Chancellor of the Exchequer what tax reliefs the Inland Revenue allow on contributions to private and public service superannuation schemes, on National Insurance contributions, and on lump sums and pensions paid under all schemes.
§ Mr. William RodgersBriefly, contributions by employees to approved occupational superannuation schemes are allowable deductions to the extent that the scheme provides pensions, or if the scheme is a statutory one. National Insurance contributions do not rank for relief. Lump sums payable out of approved schemes are not taxable on the recipient. All pensions are taxable as earned income.
§ Mr. MarksDoes the Minister not agree that there is an anomaly in that people contracting out of the National Insurance scheme gain further tax relief? Will he re-examine this with his right hon. Friend the Secretary of State for Social Services when considering the new and present schemes? Is he further aware that many pensioners whose total income from superannuation and National Insurance pensions is only slightly above the supplementary benefit level have lost much of their recent 10s. pension increase because of taxation? Will he consider raising the marginal relief allowance for old people to obviate that?
§ Mr. SpeakerOrder. Long supplementary questions cut out other Questions.
§ Mr. RodgersThe second part of the supplementary question raises much larger issues which cannot be effectively commented on today. Answering the first question, on the face of it, it may be 192 argued, there is some anomaly, but there are justifications for it. I will also draw my hon. Friend's attention to the review of the taxation treatment of superannuation arrangements which is at present being made.
§ Mr. Fletcher-CookeIs the Minister aware that self-employed persons are allowed no lump sum relief because they are not allowed to draw any of their pension as a lump sum? Will he include that anomaly in the review?
§ Mr. RodgersIt is certainly a point which we should bear in mind.