§ 24. Mr. John Townendasked the Chancellor of the Exchequer whether it is proposed to increase civil servants' pay to compensate them for income tax they will have to pay on perquisites.
§ Mr. WakehamNo. The question currently under consideration is whether certain allowances paid to civil servants to cover expenses they incur as part of their jobs should be taxed. The Government's view is that there should be no difference between the public and private sectors in the tax treatment of this sort of allowance. At issue is a sum of some £10 million, rather than the £250 million which has somehow gained currency and which my hon. Friend has quoted in previous exchanges in the House. The Inland Revenue's view is that the present law requires allowances worth some £10 million to be taxed, in which case it is clearly right to consider whether the net sums payable are appropriate to the level of expenses incurred.