Sunday, March 1, 2009

Extract of a letter sent to Mr. Timms MP Financial Secretary to the Treasury

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Mr. Stephen Timms, Financial Secretary to the Treasury,
HM Treasury,
1, Horse Guards Road, London,
Three teachers all with identical teaching careers (except as described below) and all with the same superannuation payments to the same teachers’ superannuation scheme.
a/. A British citizen, taught in a local authority school
b/. A British citizen, taught in a private school.
c/. A French citizen, taught in a local authority school.

All three retire to France. All require home-help support (this attracts a 50% rebate of the costs against tax in France).

The pensions of b/. and c/. are taxed in France.
The pension of a/. is required to be taxed in the UK as his service is deemed to be ‘to the British Government or local government’ – These are the rules of the Double Taxation Convention between Britain and France.

The taxation burden of a/. is considerably greater than b/. or c/. largely, though not entirely, because the rebates on tax which accrue to the costs of the home help are not available to a/. since his tax is paid to the UK.

A. I taught 8 years in the private sector and 24 years in the ’state’ sector. Nevertheless all 100% of my pension is taxed in the UK.

Question. Will you agree with me that under the rules one quarter of my pension should be ‘exportable’ to France?

B. Because of the French taxation system vis-à-vis the British imposition of the Double Taxation Convention on my pension, I am at least 1000 euros a year worse off than the retired teachers who fall under category b/. or c/.
Question . Will you agree that this is an inequitable situation?

C. The above heavier tax load could be resolved if I renounced my British nationality and adopted French nationality.

Question. Would you advise me to change my national status to achieve equitability in taxation?
Since your answer to this third (rhetorical) question must surely (?) be ‘no’. Then I must ask you;-
What will you (HM Government) do to ensure that my taxation burden is equitable? ..."