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Paye (Agricultural Workers)

Volume 465: debated on Tuesday 17 May 1949

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48.

asked the Financial Secretary to the Treasury whether he is aware of the unfairness of existing regulations for Pay As You Earn, whereby an unmarried agricultural worker in group 35 who lives in, may receive £4 8s. free of tax, but that, if he lives out and has to pay for his board and lodgings, though in the same group he may only get £2 18s. free of tax; and whether he will take steps to end this anomaly.

The liability to Income Tax in these cases is governed not by the P.A.Y.E. regulations, but by the general Income Tax law. Apart from the provisions of Part IV of the Finance Act, 1948, charging benefits in kind provided for directors and highly paid employees, the general rule is that where an employer undertakes to provide free board and lodging or other benefits which cannot be converted into cash, the value is not income for taxation purposes.

Is the right hon. Gentleman aware that in the case of the agricultural worker I have quoted, who lives out and pays his own board and lodging, that board and lodging money is subject to tax, but, if the employer pays the board and lodging, it is not subject to tax?