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Post-War Credits (Ex-Servicemen)

Volume 437: debated on Thursday 8 May 1947

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asked the Financial Secretary to the Treasury why ex-Servicemen are being required to sacrifice their postwar credits in order to liquidate arrears of income tax, due to wrong assessments of Service pay by the Income Tax Commissioners.

Ex-Servicemen are treated in the same way as other tax-payers in that any arrear is set off against the Postwar Credit for the year 1945–46. I am looking into the case about which my how. Friend wrote to me a day or two ago.

May I ask my right hon. Friend whether, when the mistakes are mistakes of his own Department, made when these men were out of the country and so unable to put them right at the time, it would not be more generous, as well as more just, to spread these repayments over a long period so that the men should not feel the great loss which is incurred?

That is exactly what we do. These payments are spread over a period by arrangement, and I can assure my hon. Friend that in those cases we are spreading the amount due over quite a considerable period.

Will my right hon. Friend consider giving more publicity to the fact that it is possible for people to appeal against notices of assessment within 21 days of their having been made?

Would the Financial Secretary consider in a case—one of which I have brought to his notice—where the sum is greater than the repayments, forgiving the balance, because it is hard on a man, who really did not know what was happening, if he is docked of his postwar credit? Could not that be a full settlement?

In some cases, as the hon. Gentleman knows, that does happen, but each case must be taken on its merits. One cannot lay down any general rule and forgive people simply because they happen to be in arrears.

If the facts in this question are correct, is it not the case that a real debt is being satisfied by setting against it a future benefit, so that this must be to the great advantage of the men concerned?

So far as postwar credits for 1945–46 are concerned, my right hon. Friend made an announcement during October to the effect that the Inland Revenue was to be instructed to set off what might be due against tax arrears, and the House agreed.

Does my right hon. Friend feel that it is fair to refer to future benefit as if this were a benefit which might never accrue? Is it not the fact that these men regard this as a nest egg, and think this is a method of getting out of repayment of postwar credits?

The individual concerned can pay or have it set off. I cannot see that there is anything wrong in that. He can either pay now and have the nest egg, or go without the nest egg and have it set off.

Cannot these men who owe this money make a statement to the Chancellor on the same lines as the statement the Chancellor made the other day on Egypt?