§ Mr. Arthur Lewis
asked the Chancellor of the Exchequer under what circumstances former servants of the European Economic Community receive non-contributory severance pay and retirement pensions free of United Kingdom taxes; and whether he will, in his forthcoming Budget, change this situation so that every British citizen pays United Kingdom tax on all of his income, pensions, and so on, however and wherever obtained.
§ Mr. Ridley
Under the protocol on the privileges and immunities of the European Communities which we undertook to comply with upon entry to the EEC and which has direct legal effect in the United Kingdom, officials and other servants of the Communities are liable to Community tax, and exempt from national taxes, on emoluments paid to them by the Communities. "Emoluments" for this purpose includes pensions, severance pay, and other payments.324W
This rule applies in all Community member countries and it would not be possible to change it.