HC Deb 09 March 1995 vol 256 cc264-5W
Ms Armstrong

To ask the Chancellor of the Exchequer in what circumstances it is envisaged that people receiving incapacity benefit will be taxed at source; and how many people he estimates this will effect.

Sir George Young

[holding answer 3 March 1995]It is estimated that there will be over 300,000 new recipients of incapacity benefit in 1995–96, of whom about 200,000 are expected to have an income tax liability. Tax will be deducted under pay-as-you-earn in one of two ways. For most recipients—who have some taxable income other than their benefit—tax will be deducted by adjusting the tax code applied to that other source. For those who do not have another source of taxable income—about 10,000 recipients—tax will be deducted from their benefit by the Benefits Agency.