§ Mr. BarkerTo ask the Secretary of State for Defence what legal advice he has sought on the administration of armed forces pensions, regarding section 315 of the Income and Corporation Tax Act 1988 and preceding laws, since 1972. [60544]
§ Dr. MoonieSince 1998, when the Ministry of Defence first recognised the current problem with the mistaken taxation of attributable service invaliding pensions, it has sought legal advice on a number of aspects of the application of the Income and Corporation Tax Act (ICTA) 1988, or preceding laws. These have centred on establishing clearly the nature and extent of our responsibilities for remedying the effects of the error, in particular in the following areas:
- Clarification of the specific application of the Act and its predecessors to those receiving a pension under the armed forces pension scheme as a result of being invalided from service.
- Clarification of the eligibility of different categories of dependant of a deceased pensioner for a refund in respect of the mistaken taxation of the deceased's pension.
- Clarification of the MOD's responsibilities for tracing surviving dependants, or estates of individuals who died before refunds of tax could be made.
- The extent of the Government's legal responsibility to backdate refunds, outside the normal Inland Revenue six-year time limit.
Where the MOD has required more general advice on the implications of tax law for pensions paid under the AFPS, such as on the original legal basis of the tax exemption of invaliding pensions, this has been sought from the relevant Inland Revenue policy branch, who have the primary responsibility for tax law.
Information prior to 1998 would require extensive research and could be provided only at disproportionate cost.
§ Mr. BarkerTo ask the Secretary of State for Defence what steps his Department is taking to ensure that individuals who have been identified as having been incorrectly taxed on retired pay awarded since 1952 have been correctly reimbursed in accordance with section 315 of the Income and Corporation Tax Act 1988 and preceding statutes which shared the same wording. [60545]
§ Dr. MoonieThe reimbursement of armed forces pensioners identified as having been taxed incorrectly falls to the Inland Revenue and as such, no steps of the manner the hon. Gentleman describe are taken by the Ministry of Defence. On identifying a pension that has been taxed in error, the Ministry of Defence does, however, provide full details to the Inland Revenue of the annual pension paid from the date upon which an error occurred, so that any reimbursement due can be correctly calculated and paid.