TAXATION OF AIRCREW EXPENSES (Hansard, 14 December 1977)

HL Deb 14 December 1977 vol 387 cc2111-2 2111

§ 2.40 p.m.

§ Lord TREFGARNE
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

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§ The Question was as follows:

§ To ask Her Majesty's Government whether licence renewal fees and associated medical costs paid by British Airways on behalf of their aircrew are regarded as taxable emoluments, and whether these payments are taken into consideration when determining compliance with Government incomes policy.

Lord ORAM
My Lords, British Airways inform me that the question of taxation has yet to be finalised. The cost of payments will be included as part of the general negotiations on pay and conditions under the current phase of the Government's pay policy.

§ Lord TREFGARNE
My Lords, while thanking the noble Lord for that reply, and admitting to being somewhat perplexed by the last part of it, may I ask him on the question of taxation whether it would not have been wiser to resolve that matter immediately the concession was agreed, or at least soon after? Reverting to the other question of the pay policy, ought not that, too, to be resolved with the greatest expedition?

Lord ORAM
My Lords, I agree that speed is desirable in these matters, but I think that the tax position, though perhaps not highly important, is a little complex. So far, £27 of a tax allowance for pilots has been negotiated with the Inland Revenue, and that obviously needs to be adjusted now that these expenses are paid by British Airways. I agree with the noble Lord that the question of aligning these payments with the pay policy is a matter to which urgent attention should be given.

§ Lord TREFGARNE
My Lords, though I thank the noble Lord for that further clarification, may I ask him one more question: Should pilots working for companies other than British Airways now claim a tax allowance against these costs, which they have to meet from their own pockets?

Lord ORAM
My Lords, this is a matter for the other airlines to take up separately. But I agree that the precedent established by British Airways will be an important factor in this consideration.