§ '(1) The Board shall repay to police authorities any tax paid by those authorities by reason of the regulations mentioned in subsection (2) below which required police authorities to discharge any tax liability of members of police forces arising in consequence of the provision of free accommodation); and no person other than a police authority shall be entitled to any repayment or credit in respect of tax paid as aforesaid unless he has made an application in that behalf to the Board or an inspector before the coming into force of this section.
§ (2) The regulations referred to above are—
- (a) Regulation 30A of the Police Regulations 1952;
- (b) Regulation 40A of the Police (Scotland) Regulations 1956;
- (c) any regulation subsequently in force and corresponding to either of those mentioned above.
§ (3) Subsection (1) above shall also apply to tax paid by the Ministry of Home Affairs for Northern Ireland or the Police Authority for Northern Ireland by reason of Article 8A of the Royal Ulster Constabulary Allowances (Rent and Compensatory Grant) Order 1963 or of any corresponding provision subsequently in force, but any tax so paid by the Ministry shall be repaid to the Authority.
§ (4) This section shall be deemed to have come into force on 7th July 1978.'.—[Mr. Robert Sheldon.]
§ Brought up, and read the First time.
§ Mr. Robert Sheldon
I beg to move, That the clause be read a Second time.
This follows the decision of the High Court in 1976 in the case of Langley v. Appleby that the provision of living accommodation for police officers does not result in liability to tax. Under police regulations, the police authorities have been liable to payment of tax arising from the provision of living accommodation for their officers. Now that the court has held that such tax is not due, repayments will need to be made to those who paid the tax. It is anomalous that because the tax was paid on behalf of the police officers, it is only they, who have not 1295 paid the tax, who in law can claim the repayment. The clause puts right an omission in the original regulations and ensures that the tax will be repaid to those who paid it.
§ Mr. MacGregor
We welcome the new clause, although it is odd that it was not dealt with earlier, since it was clear that it would he necessary. As the new clause was put down late, we have not been able to take outside representations into account. However, it seems fairly straightforward.
Did any other groups, in the public or private sector, have to face tax on their job-related accommodation and might they need a similar provision? Or is this problem peculiar to the police because it was the local authorities which paid the tax?
Since we were among those urging that job-related accommodation should be dealt with in this way, we have no wish to oppose the new clause.
§ Mr. Anthony Nelson (Chichester)
I, too, welcome the new clause. Subsection (4) says that it will come into force on 7th July 1978. Has any estimate been made in the Treasury of the amount which will be repaid?
§ Mr. Robert Sheldon
In answer to the hon. Member for Norfolk, South (Mr. MacGregor), a private employer obviously could provide living accommodation for his employees. What is clearly exceptional and distinguishes the treatment we seek to give the police authorities is that they were under a statutory obligation to pay the tax, and the courts have relieved them of that necessity. Our estimate is that the sum involved is up to £20 million, with possibly something extra for interest.
§ Mr. MacGregor
Are there any companies in the private sector which may have had similar arrangements and whose employees therefore will not get this retrospective tax benefit? Or does this apply only to police authorities?
§ Mr. Sheldon
I am sorry that I do not have any knowledge of what arrangements were made by individual companies, but that surely is not the point at issue. The police authorities were instructed by statute to act in this way. The recent court case showed that there 1296 was a difference between the original interpretation and what the courts actually found. Therefore, tax refunds must be made available to the police authorities. There is no comparable situation in the private sector.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.