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Artistes (Income Tax)

Volume 531: debated on Thursday 28 October 1954

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27.

asked the Chancellor of the Exchequer whether he is aware of the public concern at the accumulation of large sums, over periods of many years, in arrears of Income Tax and Surtax by members of the entertainment professions; and whether he will make stricter regulations concerning collection of arrears of Income Tax and Surtax.

I share this concern, and would refer my hon. Friend to the replies given by my predecessor to the hon. Members for Ilford, South (Squadron Leader Cooper) and Liverpool, Kirkdale (Mr. Keenan) on 31st March and 1st April. As he then stated, the Inland Revenue has continuously under review the most effective means of assessing and collecting tax due from these and all other professions and occupations.

Is my hon. Friend aware that workers, who have their Income Tax deducted from their pay packet before they touch it, and small businessmen, professional men and so on who often find themselves pilloried in the courts for small sums, find the position very difficult to accept? There seems to be evidence that there is one policy for the small defaulter and another for the large. Can my hon. Friend say whether there has been any progress during the six months or more since the Questions to which he refers were asked and answered?

Might I also ask if there is not something rather shocking in the fact that men like Robert Newton can get away with about £40,000 of Income Tax while, in the last published figures, 31 people were sent to prison for sums which were trifling by comparison with that large figure?

I think that we all feel very strongly about those who attempt to evade the tax collector. There is, however, the difficulty that one cannot easily apply P.A.Y.E. to people in the entertainment profession because, in the main, they have not an employer. For that reason it is impossible to collect the tax under P.A.Y.E. at the source. I can only repeat that the Inland Revenue is constantly seeking new means to catch up on tax evaders, though some still slip through the net.

Might I ask the Minister to look at newspapers in which he will find a report about a case in my own constituency in which an hotel keeper is bankrupt, and one of the main items of bankruptcy is a terrifically large sum due for Income Tax?

If he will send them to me, I shall be very interested to look at the local papers from the hon. Member's constituency.

28.

asked the Chancellor of the Exchequer if he is aware of the Income Tax concessions made to members of the entertainment professions in respect of expenditure on hospitality, clothing and other items; and what steps are taken by the Commissioners of Inland Revenue to ensure that all expenditure in respect of which such concessions are made is necessarily and exclusively incurred by the taxpayers concerned in the discharge of their duties.

Members of the entertainment professions are, like members of other professions, chargeable to Income Tax in accordance with the relevant statutory provisions. They enjoy no special concessions. In computing the profits of a profession chargeable to tax, no deduction is allowable in respect of sums not wholly and exclusively laid out or expended for the purposes of the profession, and I can assure my hon. Friend that the Inland Revenue uses all the means available to it under the law to ensure that inadmissible items are not allowed.

Does not the evidence show that many members of the entertainment profession, whilst enjoying a substantial portion of their income free of tax, manage to evade tax on the rest? Is my hon. Friend aware of two cases —one that of an actress who was allowed the cost of a mink coat as a chargeable expense, and the other the case of Diana Dors who draws £60 a week, £50 of which is tax free? Does he not feel that figures like that merit the closest scrutiny?

I am precluded from discussing in the House the affairs of individual taxpayers, but I will examine any information which my hon. Friend may wish to send me.

Can the Minister answer the second supplementary question which the hon. Member for Lewisham, West (Mr. H. A. Price) asked earlier, as to what precise steps have been taken by the Treasury in the interval of six months between the time the Questions to which the Financial Secretary referred were asked, and now?

I really think that in matters of this sort it is better not to say in public what precise steps the tax collectors are taking.