HC Deb 07 November 2001 vol 374 cc249-50W
Mr. Greenway

To ask the Secretary of State for Defence if he will make a statement on the compensation he proposes to pay to(a) Army pensioners, (b) Army widows and (c) estates which have wrongly had income tax deducted by his Department from their invalidity pensions. [13141]

Dr. Moonie

Individuals wrongly taxed receive a refund of tax and an extra amount as compensation for the delay. The Inland Revenue calls this additional payment a repayment supplement. The Income Corporation Taxes Act 1988 (Section 824) governs the way the Inland Revenue calculates the repayment supplement. The precise formula is set out in Statutory Instrument No 1297 of 1989.

Mr. Greenway

To ask the Secretary of State for Defence what action he will take to identify(a) Army pensioners, (b) Army widows and (c) estates which have wrongly had income tax deducted by his Department from their invalidity pensions. [13140]

Dr. Moonie

Following the discovery of a taxation error affecting Army invaliding pensions in 1998, we have manually trawled through individuals' pension files, including widows and dependants, and publicised the matter through the ex-service organisations and the War Widows Association. This publicity has included articles in their journals and circulars. All those identified as being incorrectly taxed, except a small number currently under investigation, have received a full refund with compensation. The Ministry of Defence has no plans to undertake further action on this matter.