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Ministry of Defence

Answer

Mr. Barker: To ask the Secretary of State for Defence on what grounds his Department dismissed the issue of retired officers or their widows who have continued to pay tax incorrectly on retired pay awarded since 1952 on the grounds of disability attributable to or aggravated by service in 1997. [31462] Dr. Moonie: As I explained in my statement in the House on 23 January 2002, Official Report, columns 891-902, with regard to tax exemption of Army attributable pensions, the error was uncovered by a retired Army pensioner, Major Perry. Our records show that Major Perry first raised the taxation of his service invaliding pension in December 1997. He then went through two stages of appeal at higher levels and at each his arguments were rejected. It was only when he made a further approach that the error was recognised. The issue turned on whether only Service Attributable Pensions were tax exempt or whether, as in Major Perry's case, Service Invaliding Pensions should also be exempt. At the initial appeal stages, the position with regard to the law was misinterpreted and the difference in practice between the Army on the one hand, and the Royal Navy and Royal Air Force on the other, had not become apparent. It was only in 1998 that the correct legal position was recognised and action to remedy the error put in hand. The point at issue was not straightforward. The error should, however, have been recognised when Major Perry first raised his concerns and I can only reiterate our apology to him and those other Army pensioners or their spouses affected.

Secondary information

Type

Written question

Reference

31462; 379 c499-500W;379 c495-6W

Session

2001-02

Subjects

Pensions Repayments Taxation War pensions Widowed people Veterans

Link

View this Written question on www.publications.parliament.uk