§ I will now mention three minor tax measures, the first two of which will make very necessary savings in Revenue staff.
§ First, I propose to correct an anomaly which has caused a lot of unnecessary work. In the year in which a couple marry, the woman is at present entitled to the single person's allowance against her income before marriage and her husband 264 is entitled to the wife's earnings allowance against her post-marriage earnings. I propose to end this duplication of allowances in the year of marriage. This proposal should save 65 staff and yield £60 million.
§ Second, I have been looking at the arrangements for allowing tax relief for life assurance premiums. Because this relief differs from other tax allowances, it requires special attention in tax offices. The total work on giving the relief mainly through the PAYE system now occupies the equivalent of between 1,000 and 1,500 staff. To simplify the administration and save most of these staff I have decided that a system of relief by deduction should be introduced. This will allow policyholders to deduct an appropriate amount from each payment of an eligible premium; the Life Offices will then receive corresponding direct payments from the Revenue to reimburse them for the reduction in their premium receipts. It will require some changes in the form of the relief.
§ Both the Revenue and the Life Offices—who will of course be consulted on all the arrangements—will need some time to prepare for the new system. It will not therefore begin until 1979–80.
§ Third, I propose to raise the limits on the annual amounts which a self-employed person may pay by way of a tax-relieved premium to provide himself with an annuity on retirement. These amounts have not been changed since 1971 and the Government gave an undertaking last year that they would be reviewed. I have decided to increase the limit of £1,500 to £2,250, with corresponding increases in the limits for people born before 1916 and for the special forms of contract first introduced in 1971.