§ Mr. Norman Lamontasked the Chancellor of the Exchequer whether, in his review of fringe benefits, he will consider the taxation position of allowances payable to employees of the Foreign Office.
§ Mr. Robert SheldonI have noted the hon. Member's point.
§ Mr. Norman Lamontasked the Chancellor of the Exchequer whether he will take steps to ensure that the taxation of boarding school allowances payable to Foreign Office employees is not treated in any different way for income tax purposes to similar allowances payable by British firms to employees who necessarily have to work overseas.
§ Mr. Robert SheldonAn employee of a British firm who is required to work overseas for an extended period would not normally be liable to United Kingdom tax on any boarding school allowance paid to him by his employer whilst he is abroad. Likewise, a Crown servant is not taxable on such an allowance paid to him whilst he is serving overseas. Where such an allowance continues to be paid after return to this country, it is taxable in either case.
§ Mr. Norman Lamontasked the Chancellor of the Exchequer (1) how boarding school allowances given to Foreign Office employees are treated for income tax purposes;
(2) whether boarding school allowances paid to Foreign Office employees are treated in different ways for tax pur 220W poses according to whether the recipient is resident in the United Kingdom or abroad.
§ Mr. Robert SheldonBoarding school allowances paid to Foreign Office employees serving overseas are certified by the Minister for the Civil Service as representing compensation for the extra cost of having to live outside the United Kingdom to perform their duties, and are therefore exempt from United Kingdom income tax under the provisions of Section 369 of the Taxes Act 1970. Such allowances become liable to income tax after the employee returns to this country.
§ Mr. Norman Lamontasked the Chancellor of the Exchequer what Acts of Parliament or orders govern the taxation position of educational allowances paid to Foreign Office employees.
§ Mr. Robert SheldonThe taxation position of any allowance paid to Foreign Office employees is governed by the general rules of Schedule E contained in Chapter I of Part VIII of the Taxes Act 1970 and by the provisions of Section 369 of that Act covering Foreign Service allowances.
§ Mr. Norman Lamontasked the Chancellor of the Exchequer whether Foreign Office employees pay capital gains tax on the disposal of United Kingdom assets while serving overseas.
§ Mr. Robert SheldonIf the employee's tour of duty overseas is of such a length that he ceases to be either resident or ordinarily resident in the United Kingdom he will be outside the scope of capital gains tax, like any other employee who is away for a similar period.
§ Mr. Norman Lamontasked the Chancellor of the Exchequer whether the employees of the Foreign Office are entitled to rebates of purchase tax on consumer goods bought in the United Kingdom and subsequently taken to their posts abroad.
§ Mr. Robert SheldonPurchase tax was replaced by value added tax on 1st April 1973. Foreign and Commonwealth Office employees may be relieved of VAT on purchases made in the United Kingdom only if they qualify by reason of 221W residence abroad to be treated as overseas visitors to the United Kingdom.
§ Mr. Norman Lamontasked the Chancellor of the Exchequer whether there are any United Kingdom taxes from which Foreign Office employees are exempt while serving overseas.
§ Mr. Robert SheldonSuch employees are exempt from income tax on Foreign Service allowances, but there is no other special tax treatment available to them.