asked Mr. Chancellor of the Exchequer, Whether he has made any and what arrangement respecting the collection of the Income Tax since the 5th of April, when the last Income Tax expired; whether any collector can legally demand payment of Income Tax at the present moment; and, whether, seeing that this great inconvenience on the collection of the Income Tax must recur so long as an interval of time is allowed to exist between the expiration of one Income Tax Act and the re-enactment of another similar Act, he will now introduce a Clause which will make the Income Tax continue until the 5th of July instead of till the 5th of April, unless Parliament should previously to that day, 5th of July, have passed a new Act?
in reply, said, the Question was a very difficult one, as his hon. Friend was aware. The matter had been frequently under the consideration of the various Governments and of the Board of Inland Revenue. The answer he had received to the inquiries he had made of the practical officers of the Inland Revenue was to this effect—
"No arrangement is necessary respecting the collection of the Income Tax since the 5th of April, when the duties granted by the Customs and Inland Revenue Act, 1875, ceased to be chargeable, as that Act provides for the continuance of provisions contained in former Income Tax Acts, under which the duties do not cease with respect to any assessment which ought to have been made before the 6th of April, but which shall not have been made and completed; nor with respect to any duties assessed and remaining unpaid which the collectors still have power to levy and recover.
"The collectors for the year 1876 will not be appointed, nor will any assessments be made until after the passing of a new Act.
"The only exceptions are where the duties may he retained in respect of payments on account of salaries, pensions, &c., in public offices, and foreign or colonial dividends, in which cases the agents intrusted with the payment will, by the continuance of the provisions contained, in the 43rd section of the 25 Vic., cap. 22, be required to account for the sums deducted or retained by them within one month after the passing of the Act.
"In the event, as at present, of an alteration in the rate of duty, the custom has always been, after the passing of a Resolution, for the deduction to be made at the rate authorized by the Resolution; but, in the event of payments having been made before the passing of the Resolution, and deductions having been made at a higher or lower rate than may he applicable, an adjustment is made by the agents on the occasion of the next payment if the parties are the same, or repayments are made where necessary in cases where too much has been deducted; while persons from whom proper deductions have not been made are liable personally to make returns for assessment.
It was his intention to give the subject further consideration, and he would communicate with his hon. Friend in reference to it."There has been no great inconvenience found in carrying out these arrangements, but it is certain there would be great inconvenience in making the Income Tax continue at the old rate of duty—if that is what is intended by Mr. Hankey—until the 5th of July, instead of till the 5th of April, unless Parliament shall previously to that day (the 5th of July) have passed a new Act; because this would cause great uncertainty as to the rate of tax to be deducted by the agents, who must, of course, calculate, before the day of payment of dividends, the amounts to be deducted there from, while it would greatly increase the difficulty of estimating the produce of the Income Tax for the year."