§ Mr. Knoxasked the Chancellor of the Exchequer, without reference to any individual's tax affairs, if he will calculate what the gross salary of a Prime Minister would have to be in order for the Prime Minister's net salary to remain unchanged if the special tax-free allowance of the Prime Minister were abolished, assuming a Prime Minister with a husband and two children over 21 years of age.
§ Mr. Robert SheldonThe official salary of the Prime Minister is £20,000 a year, and under Section 191 of the Taxes Act the Treasury has fixed a sum of £5,000 to be deducted in respect of expenses. This fixed deduction represents for 1972–73 and subsequent years the Treasury's estimate of the average annual amount which would qualify for tax relief under the Schedule E expenses rule. The withdrawal of the fixed deduction would not affect the Prime Minister's right to claim a deduction for such expenses under the general law: there would therefore be a difference in net salary only to the extent that the actual deductible expenses in any year differed from the Treasury's estimate under Section 191 of the average annual amount.