Clause 8 - Meaning of ''applicable year of assessment'' in section 7
Finance Bill
12:30 pm
Philip Hammond (Shadow Chief Secretary To the Treasury, Treasury; Runnymede and Weybridge, Conservative)
I am not an expert on the PAYE system, although the hon. Gentleman may be, but the fact that tax is subject to PAYE deduction does not exempt the taxpayer from liability to pay an amount if, in error, it is not deducted or if something goes wrong with the PAYE system. I should have thought that the liability attaches primarily to the taxpayer and there is an obligation on the employer to deduct the PAYE amount.
I was going to ask some questions about this provision for PAYE pension deduction under clause 10, because I suspect that the Minister will tell us that this is a narrow class of all lump sum payments. However, we will find out about that in due course.
I also have a question about subsection (4), which the Minister has explained. Anyone who penetrated the identity of P and S on reading the Bill will have concluded correctly that they are married people, or those treated as married for the purposes of the pensions legislation, and P stands to inherit the lump sum following S's death. Can the Minister explain why the logic of allowing the year of assessment by election to be postponed by a year to avoid a spike is not extended to the widow or widower of S following S's death? Why is there not the same provision under subsection (4), allowing an election for postponement by one year?