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Clause 5—(Delivery Of Particulars For Purposes Of Super-Tax)

Volume 155: debated on Tuesday 20 June 1922

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  • (1) The Special Commissioners may, whether an assessment to Super-tax has been made or not, require any individual who has been required to make a return of his total income for the purposes of Super-tax to furnish to them within such time as they may prescribe, not being less than twenty-one days, such particulars as to the several sources of his income and the amount arising from each source, and as to the nature and the amount of any deductions claimed to be allowed therefrom, as they consider necessary.
  • (2) If any person without reasonable excuse fails to furnish within the time prescribes any particulars required under this Section, he shall be liable to a penalty not exceeding fifty pounds, and after judgment has been given for that penalty to a further penalty of the like amount for every day during which the failure continues.
  • Amendment proposed: In Sub-section (1), leave out the words "twenty-one" ["twenty-one days"], and insert instead thereof the word "twenty-eight."—[ Mr. A. M. Samuel.]

    Amendment agreed to.

    I beg to move in Sub-section (1) to leave out the words "they consider necessary" ["as they consider necessary"], and to insert instead thereof the words "required by the Income Tax Act, 1918."

    This is a protection given by Statute to the tax-payer, and should be continued. It should not be left to the discretion of Special Commissioners. Legislation already exists, and we should have the safeguards to which we are entitled.

    Will the Committee forgive me if I remind them what was the arrangement made across the Floor of the House yesterday, that the Committee stage should be concluded at the end of the fourth day and we are well towards the end of the second day, and there is a good deal to be done yet. There was also the arrangement yesterday that we should not on any night sit unduly late. I suggest that we are getting rather near to that condition.

    My appeal is to everyone to get through the remainder of Part II as rapidly as we can. This Amendment is one that would go to the root of the Clause and the Clause is a vital one. Under the law as it stands, the only obligation on a taxpayer is to make a return of his total income from all sources. It is true that the Special Commissioners who assess Super-tax do from time to time ask for particulars, but they have no right to demand particulars. Let me give the Committee a few instances showing the vital need for obtaining such particulars. We find in numerous cases that the returns are so inaccurate, the particulars given so insufficient, that as a matter of fact the present system affords cover for carelessness and error which are hardly distinguishable in result from fraud. In one case where it was possible to obtain details after the death of the taxpayer, the correct figure should have been over £22,000, the dividends in one private company having been entirely omitted. The figure returned in the Super-tax return was £2,500. In another case, where dividends of £14,000 and £15,000 had been returned, it was found on investigation that the correct figures should have been £37,000 and £38,000. I have a number of other instances. One nil return should have been £8,900. Another nil return should have been £6,300. What is wanted is to give to the Special Commissioners power in these classes of cases of asking for particulars of the different sorts of income, and particulars of different deductions. If that is done this kind of quite unintentional evadence may be avoided. I ask the hon. Member not to press his Amendment.

    The hon. Gentleman has suggested that it is getting late. May I remind him that the Government put down a Clause which proves to be utterly unworkable, and it takes the Committee two hours to persuade the Chancellor of the Exchequer to withdraw it. It is not our fault that for the last two hours we have been talking about an unworkable Clause. I suggest, therefore, that it is the business of the Government not to keep us up any longer, having wasted two hours of Parliamentary time.

    2.0 A.M.

    With regard to the Amendment, I should like to know whether the Special Commissioners have at length been instructed to find out from the Inland Revenue what is the income returned to the Inland Revenue. My information is that ever since the Super-tax was introduced the Super-tax Commissioners have acted completely on their own, have made a rough-and-ready sort of list of people liable, and have never taken the trouble to co-operate with the Inland Revenue people to find out; who is liable. I hope that in future the Chancellor of the Exchequer will see to it that there is co-operation between the Super-tax Commissioners and the Inland Revenue authorities. The want of cooperation up to now has led to the loss of a great deal of revenue.

    I am entirely at one with the Government in thinking that the Commissioners, or the authorities, should have every power to get at the truth, but I am totally against a wider roving type of power such as is indicated by the words "such as they consider necessary." Where is that going to lead to? They may ask all sorts of questions of trade secrecy. There is no restriction as to the questions that the Special Commissioners may ask, questions which they may consider reasonable we may consider unreasonable and harassing. There are limits to the length to which the Commissioners should go, and they should be defined by the House of Commons.

    I am afraid my hon. Friend has not given due weight to the words of the Clause. The Commissioners are strictly limited in regard to the particulars they are entitled to ask for—particulars as to the several sources of income, the amount from each source, and the nature and the amount of the deductions.

    I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

    It is an extraordinary thing that we should be discussing so many intricate matters of finance at this late hour of the night. They are questions of the most important character, and I really think that we ought to report Progress. I have listened to debates of the utmost importance to the commercial interests of this country, and I think it is a scandalous thing that at 2 o'clock in the morning we should start to discuss another thing of vital interest to commercial men.

    Amendment negatived.

    Clause, as amended, ordered to stand part of the Bill.