HC Deb 06 August 1976 vol 916 cc1064-6W
Mr. Maurice Macmillan

asked the Chancellor of the Exchequer in which member States of the European Community (a) contributions for old-age pensions, (b) contributions for sickness insurance and (c) contributions for unemployment insurance are allowed as a deduction against income from employment for the purposes of income tax.

Mr. Denzil Davies

All social security contributions are deductible in Belgium, France, Italy, Luxembourg and, subject to limits related to the number of the taxpayer's dependants, Germany. In the Netherlands, old age pensions and unemployment insurance contributions are deductible, but not all sickness insurance contributions. In Ireland, only a proportion of the total annual social security contributions is allowable, and in Denmark and the United Kingdom no deduction for social security contributions is allowable.

Mr. Maurice Macmillan

asked the Chancellor of the Exchequer what concessions against income tax are allowed in (a) France and (b) the Federal Republic of Germany to facilitate the purchase of shares by an employee, or trust benefiting employees, of the employing company.

Mr. Denzil Davies

I understand that in France deductions from employees' wages and salaries, together with similar amounts contributed by the company on the employees' behalf, for the purchase of shares issued solely for subscription by the employees are, subject to certain limits, exempt from income tax.

In Germany amounts set aside from wages and salaries under approved schemes for buying shares in the employing company are, subject to certain limits which vary according to the employees' family circumstances, exempt from income tax. Where the employing company contributes towards such a scheme there is a reduction in its corporation tax equivalent to 30 per cent. of the value of its contributions.

I am not aware of any special tax provisions in these countries governing purchases by trusts.

Mr. Maurice Macmillan

asked the Chancellor of the Exchequer in which member States of the European Community the cost of travel to and from work is allowed as a deduction against income from that work for the purposes of income tax.

Mr. Denzil Davies

In Belgium, Denmark and France the cost of reasonable travel from home to work is included in, and normally covered by, the flat rate deductions which are given for employee's expenses. In Germany, Luxembourg and the Netherlands, deductions are given for home to work travel up to certain limits. The cost of such travel is not deductible in Ireland, Italy and the United Kingdom.

Mr. Maurice Macmillan

asked the Chancellor of the Exchequer in which member States of the European Community interest on loans to facilitate the purchase of shares in the company which employs the taxpayer paying interest is allowed as a deduction against income for the purposes of income tax.

Mr. Denzil Davies

In the United Kingdom interest is allowed on a loan used by an individual to acquire ordinary shares of a close trading or estate company in which he has an interest of 5 per cent. or more, and for which he works full-time in a managerial capacity.

In other member States I understand that there are no specific provisions about this type of interest, but that under the general provisions governing interest payments the following arrangements are likely to apply: Belgium: Interest is normally deductible if the loan is contracted in order to acquire or conserve income. Denmark: All forms of interest are deductible. France: This type of interest would not be deductible under the general provisions currently in force. Germany: The interest would be deductible, any such deduction being limited to the income derived from the shares acquired with the loan in the year in which the interest was paid. Republic of Ireland: The interest would be deductible, subject to an annual limit of £2.000. Italy: The interest would be deductible subject to disclosure of the payee's name and address. Luxembourg: All interest payments are deductible. Netherlands: All interest payments are deductible.

Mr. Maurice Macmillan

asked the Chancellor of the Exchequer whether he will publish in theOfficial Report a table, which shows in £ sterling, the pre-tax income a married man with two children aged 11 and 13 years would require in France and the Federal Republic of Germany to enjoy the same post-tax income as a married man with two children earning (a) £5,000 per annum, (b) £7,500 per annum, (c) £10,000 per annum, (d) £15,000 per annum, (e) £20,000 per annum on 1st July 1973 and 1st July 1976 at the exchange rates appropriate for each date; and whether he will arrange for the table to show for all three countries (1) the post-tax income and (2) the percentage of income taken in income tax.

Mr. Denzil Davies

I regret that information in this form is not readily available and to make the necessary calculations would require a disproportionate cost in time and resources.