§ Ms PrimaroloTo ask the Chancellor of the Exchequer how much per person granted tax relief it costs to administer tax relief on private medical insurance.
§ Mr. DorrellThe annual cost to the Exchequer of administering the tax relief on premiums under private medical insurance contracts averages 42p for each person granted tax relief.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer what tax relief, rebates or allowances are received by companies offering private medical insurance to their staff.
§ Mr. DorrellThe general rule when calculating the trading profits of a business is that a deduction is allowed for expenses incurred wholly and exclusively for business purposes. If an employer incurs expenditure in offering private medical insurance to employees, the expenses would generally qualify as a deduction under this rule as part of the remuneration package.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer (1) what was the cost to the Treasury of tax relief on private medical insurance in(a) 1990, (b) 1991, (c) 1992 and (d) 1993;
(2) what would be the total saving to the Exchequer of scrapping tax relief on private medical insurance.
§ Mr. DorrellThe estimated costs in each year since 1990–91 are given in the table:
Year Cost of tax relief on private medical insurance for those aged 60 or more(£ million) 1990–91 40 1991–92 60 1992–93 70 1993–94 80 The estimated saving to the Exchequer if tax relief on premiums paid in 1994–95 was abolished is £85 million including administrative costs.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer whether private medical insurance premia will be liable to tax.
§ Sir John CopeUnder the proposals announced by my right hon. and learned Friend in his Budget statement, private medical insurance premia will be liable to insurance premium tax. Premia in respect of long-term insurance as defined in the Insurance Companies Act 1982 —which includes permanent health insurance and life assurance—will be exempt.