§ Mr. Carrington
To ask the Chancellor of the Exchequer whether the Government have any plans to introduce income tax relief on premiums for private medical insurance; and if he will make a statement.
§ Mr. Lawson
In the White Paper "Working for Patients" (Cm 555) the Government today announced a new income tax relief on premiums for private medical insurance for those aged 60 and over. The relief will be given at the basic rate by deduction at source (in a similar way to the MIRAS arrangement for mortgagees). It will be available either where an individual aged 60 or over pays his or her own premiums on an eligible policy, or where 115W someone else, such as a relative, pays on their behalf. Where higher rate relief is due, the additional amount will be given by the tax office, for example by adjustment to the PAYE code or in an assessment.
Legislation to introduce the relief will be contained in the next Finance Bill, and will take effect from 6 April 1990. I have authorised the Inland Revenue to consult the medical insurance industry urgently about the details of the relief.