HC Deb 15 January 1985 vol 71 cc117-8W
Mrs. Clwyd

asked the Chancellor of the Exchequer (1) if there has been any change in the practice of the Inland Revenue with regard to the treatment as a taxable benefit of the provision of a workplace nursery; and if he will make a statement;

(2) if the decision to charge tax on employees' workplace nursery benefits resulted from a direction mentioning nurseries from the Board of the Inland Revenue;

(3) how much tax, including backdated payments, he expects to be collected by the taxation of employees on the benefits of a workplace nursery in the current financial year.

Mr. Moore

There has been no change in the practice of the Inland Revenue in relation to the tax treatment of the benefit of employer subsidised nurseries. Such benefits have been taxable in the hands of directors and certain employees (currently those earning at a rate of £8,500 a year or more) since legislation was first introduced by the Labour Government in 1948. I regret that a firm estimate of the tax yield from this particular benefit cannot be made.

Mrs. Clwyd

asked the Chancellor of the Exchequer (1) if it is the intention of the Inland Revenue to claim arrears of tax from users of its own former staff nursery;

(2) how many staff of the Inland Revenue who used the Inland Revenue staff nursery during its existence are now liable to pay backdated tax on that benefit.

Mr. Moore

The relevant tax rules apply to directors and "higher paid" employees: they apply to civil servants be increased with a fiscal adjustment of (a) £1.5 billion and (b) £2 billion, if the same percentage increase were applied to personal tax allowances and child benefit; and if he will compare the consequent increase in net income for a two-child family on (i) half average earnings, (ii) three-quarters average earnings, (iii) average earnings, (iv) one and half average earnings and (v) twice average earnings with the increase in net income for these groups if the whole of the two sums were used to increase personal allowances.

Mr. Moore

Information based on full year direct revenue or expenditure costs at forecast 1985–86 levels is in the table. The income tax calculations assume that all the main personal allowances would be increased by the same percentage.

as to other employees and were applied throughout the period that the Inland Revenue staff nursery was in existence.