§ Mr. Peter Rees
The estimated costs of the tax reliefs for 1979–80 are as follows:
£ millions (a) on employees' contributions 700 (b) on capital gains not available (c) on employer's contributions 1,150
The overall cost of tax relief for approved pension schemes is estimated at £500 million in 1979–80. This figure, calculated on the basis set out in the Inland Revenue's note of February 1978 to the General Sub-Committee of the Expenditure Committee—second report 1977–78, appendix 15—includes the cost of relief for employees' contributions and the cost of exempting funds' investment income, net of tax paid on pension payments, but excludes the cost relating to employers'
£ million Range of income* (£) 1973–74 1974–75 1975–76 1976–77 1977–78 1978–79† Under 1,000 2 1 1 1 — — 1,000–1,999 24 18 11 9 6 5 2,000–4,999 74 96 98 96 86 70 5,000–9,999 16 30 58 84 102 125 10,000 and over 8 12 23 33 41 60 Total 125 157 191 223 234 260 * 'Total net income' up to 1974–75; 'total income' thereafter. † Provisional
§ Mr. Field
asked the Chancellor of the Exchequer how much tax relief would be granted on a house purchased at £25,000568W
contributions, which in general qualify as a deduction as part of general labour costs, under the normal rules for computation of profits. It also includes an adjustment to the taxation of pensions to reflect the fact that they would be in part the repayment of savings for which no tax relief had been given.
These figures are provisional and subject to a wide margin of error. The estimate for employers' contributions is the additional tax which might be payable if these contributions were made not deductible in calculating profits. It has been assumed, for the purpose of the calculations, that there would be no change in the nature and rate of pension provision if the reliefs were withdrawn.