§ Mr. Murphy
asked the Chancellor of the Exchequer if he is aware of the difficulties which pensioners have in understanding their tax affairs; and whether he has any proposals for simplification.
§ Mr. Peter Rees
Yes. I think that one of the main problems here is that as things stand the tax liability is frequently dependent upon the pensioners themselves notifying details of their pensions to the Inland Revenue; and the need for this is likely to increase with the introduction of payments under the new pensions scheme from April 1979. My right hon. Friend the Secretary of State for Social Services and I have therefore agreed to introduce an arrangement which will424W reduce the need for pensioners to make returns of their income to the Revenue and will result in significant administrative savings. With effect from next year DHSS will notify the Inland Revenue of the new rates of pension payable so that the Revenue can proceed with its annual pension recording without having to ask for this information from pensioners themselves. The net administrative savings from this arrangement will be of the order of £1 million per year.