Single Person Taxation (Cohabitation)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 5th July 1973.

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Photo of Sir John Langford-Holt Sir John Langford-Holt , Shrewsbury 12:00 am, 5th July 1973

asked the Chancellor of the Exchequer, in view of the case, details of which have been sent to him, where a man and woman living together are regarded by the Department of Health and Social Security as man and wife but are regarded by the Treasury as single persons for tax purposes, whether he will take steps to see that these people are treated by the Inland Revenue for tax purposes in the same way as they are treated for social security purposes.

Photo of Mr John Nott Mr John Nott , St Ives

It would not be possible or desirable, in a tax system which applies to many millions of taxpayers. for tax inspectors to conduct detailed investigation into couples' private affairs. These same arguments do not apply under the supplementary benefits system. which is designed to meet individual cases of need.

Photo of Sir John Langford-Holt Sir John Langford-Holt , Shrewsbury

Does not my hon. Friend agree that it is absolute nonsense for one Department to regard people as being socially together and the other Department to regard them as being socially apart—for them to be regarded by his Department as being economically apart and the second Department as being economically together? Will he ask his right hon. Friend to re-examine the whole question?

Photo of Mr John Nott Mr John Nott , St Ives

Different considerations apply in the two cases. Supplementary benefits aim at the specific relief of need, and must take into account individual circumstances and the resources available to the individuals. The income tax personal allowances, however, do not directly reflect need. Their purpose is to graduate liabilities according to a very broad range of categories related to family circumstances. They are not the same thing.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

What are the detailed investigations that are necessary in the one case?

Photo of Mr John Nott Mr John Nott , St Ives

I was referring to the natural inquiries that the Supplementary Benefits Commission makes before it provides supplementary benefits to a cohabitating couple.

Photo of Mr Brian Walden Mr Brian Walden , Birmingham All Saints

Must it not be an injustice that a woman can be knocked off supplementary benefit because she is living with a man—it being assumed that the man is supporting her—and yet the man cannot make any claim on the Inland Revenue for her support? Surely the Government are trying to have the argument both ways.

Photo of Mr John Nott Mr John Nott , St Ives

I cannot answer for the system used by the Supplementary Benefits Commission. That is a matter for my right hon. Friend the Secretary of State for Social Services. In the tax system, which deals with many millions of taxpayers, it would not be practicable for tax inspectors to make the sort of inquiries into people's private lives and habits that the hon. Member seems to wish.