§ Mr. Dellasked the Chancellor of the Exchequer whether, if the Social Security Bill becomes law, persons who are paid back into the Reserve Pension Scheme after membership of an occupational pension scheme, will be required to repay to the Inland Revenue any tax deductions from which they benefited as a contributor to that occupational pension scheme.
§ Mr. Nott, pursuant to his reply [OFFICIAL REPORT, 17th May, 1973; Vol. 856, c. 362], gave the following information:
No. A tax charge at a compounded rate of 10 per cent. is, however, payable by the administrator of a Revenue-approved scheme when a refund of contributions is made, in accordance with the rules, to a person on his leaving and ceasing to be a member of that scheme.
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§ Mr. George Cunninghamasked the Chancellor of the Exchequer, assuming corporation tax on the basis and at the rate proposed for 1974–75, what would be the net cost to employers in the aggregate of an increase in their pension contributions of £40 million a year gross.
§ Mr. Nott, pursuant to his reply [OFFICIAL REPORT, 16th May, 1973; Vol. 856, c. 326]. gave the following information:
The rate of corporation tax for 1974–75 is not due to be proposed until the 1975 Budget. With an illustrative rate of 50 per cent., and assuming all the employers were companies liable to corporation tax, the net cost of an increase in pension contributions of £40 million gross would be £20 million.
§ Mr. George Cunninghamasked the Chancellor of the Exchequer, assuming total contributions from employers and employees to the proposed reserve pension scheme of £320 million a year in respect of 7 million employees of whom 5½ million pay tax at the basic rate, what is the net cost to the employees in the aggregate of contributions at the rate of 2 per cent. with tax relief and 1½ per cent. without tax relief, respectively; and what is his estimate of the total gain to the revenue by changing from the first to the second arrangement.
§ Mr. Nott, pursuant to his reply [OFFICIAL REPORT, 16th May, 1973; Vol. 856, c. 326], gave the following information:
On the figures quoted the total net cost to employees is very approximately £120 million under each system. The cost to the revenue is about £20 million less in a full year under the second system allowing for the indirect effect on corporation tax—at an illustrative rate of 50 per cent. —as well as income tax on individuals.