HC Deb 02 December 2003 vol 415 cc39-40W
Gregory Barker:

To ask the Secretary of State for Defence (1) how many (a) retired personnel and (b) widows in each of the three armed services have been identified as incorrectly paying tax on retired pay and pensions awarded since 1952 on the grounds of disability attributable to or aggravated by service; and how many of these are (i) pre-1973 pensioners and (ii) post-1973 pensioners; [141090]

(2) how many (a) retired personnel and (b) widows in each of the three armed services identified as incorrectly paying tax on retired pay and pensions awarded since 1952 on the grounds of disability attributable to or aggravated by service have received additional compensation; [141091]

(3) what criteria are used in determining additional compensation payments for retired personnel and widows of the three armed services identified as incorrectly paying tax on retired pay and pensions; [141092]

(4) if he will commission an independent inquiry into arrangements for paying compensation to retired personnel and widows of the three armed services identified as incorrectly paying tax on retired pay and pensions. [141093]

Mr. Caplin:

The following table shows the total number of individuals identified as incorrectly paying tax on their armed forces invaliding pensions since 1952. Attributable pensions paid to widows are not tax free under Inland Revenue rules, though in some cases widows may have been the beneficiaries of refunds where the pensioner is deceased. These figures are broken down by service and by pre-73 and post 1973 pensioners.

As at August 2003 Royal Navy Army Royal Air Force Total
Pre-1973 57 300 13 370
Post-1973 204 828 110 1,142
Total 261 1,128 123 1,512

Inland Revenue repayment supplement has already been paid on all tax refunds. The level of compensation to be paid to individuals affected by the tax error is a matter for the Department. I do not intend to commission an independent inquiry. Individuals who are unhappy with the Department's decision on additional compensation will be able to take their cases to the Pensions Ombudsman or to the courts. I intend to announce our decision with respect to additional compensation by 18 December.