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Tax Assessments: Period Of Notice

Volume 387: debated on Wednesday 16 November 1977

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2.51 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are aware that the Inland Revenue frequently send Notices of Assessment to Income Tax and demands for payment within 30 days during the holiday season, and that as a result taxpayers have often very little time to study these demands before the expiry of the 30-day period after which interest is payable; that this problem is accentuated by the increasing dilatoriness of the postal services; and whether they will either extend the 30-day period or instruct the Inland Revenue not to issue demands during the holiday season, or both.

My Lords, the period of 30 days from the issue of a tax assessment before the tax is payable or interest starts to run is a minimum and in many cases the taxpayer will have a longer breathing-space. But, even where there is only this minimum period, I am not aware that 30 days—which is a standard period for many tax purposes—is generally found to cause difficulty. It would not be practicable to suspend the issue of tax assessments during the time when taxpayers may be on holiday.

My Lords, is the noble and learned Lord aware that I am not asking him to suspend the issue of tax assessments but only to permit a longer period of notice?— —since it may well be the case that a taxpayer who is away on a well-earned holiday has not sufficient time on his return to consider the accuracy of the assessment, to take advice or to consider what steps he should take. Es the noble and learned Lord aware that, since the interest provisions were incorporated, this has become a very acute difficulty and one which raises a good deal of feeling?

My Lords, as I have already said, I am not aware that this is generally found to cause difficulty. I think that this noble House should appreciate that there are really two basic dates in the year—1st January and 6th July—when tax becomes payable for the kind of case which the noble Lord seems to have in mind, and in the great majority of cases the person who receives a notice of assessment and a notice to pay will have negotiated the assessment beforehand. He will tend to have a professional adviser who is entitled, at his wish, to have a copy of the notice sent to him, and in the great majority of cases there should be no difficulty.

My Lords, is the noble and learned Lord aware that, no doubt through my fault, he has not fully apprehended the point I was putting to him, which is that the assessment becomes final after 30 days if an appeal is not entered, and if the taxpayer is away on holiday he has no chance to enter an appeal? Will the noble and learned Lord consider that aspect of the matter?

My Lords, if the taxpayer is going on holiday, he knows that he is liable to pay tax because he has made a gain. He can cause the inspector to send a copy to any person whom he cares to name, and then an appeal may be entered if he chooses to appeal. If he does not appeal within the 30 days and he can demonstrate that he was away, then he will be allowed to appeal out of time. That is contained, I think, in Section 49 of the Act of 1970.

My Lords, is the noble and learned Lord aware that I am fully in support of my noble friend's Question? Is the noble and learned Lord also aware that I think his Answer was quite ridiculous, and as if he really did not know anything at all about it?

My Lords, I am certainly not surprised at the first part of the question. I must confess that I do not know very much about it, but I spent a long time studying Volume 1 of the taxes Acts in order to discover my answers. Despite her lack of confidence in me, I can assure the noble Baroness that I have given answers which are totally accurate, and that if any person finds that 30 days have elapsed owing to his having had a prolonged holiday, then he may, on his return, ask for the time to be extended and it will be extended and no one need be discomforted at all.

My Lords, will the noble and learned Lord confirm that what happened to me when I fell into exactly these circumstances is the practice, and will he encourage the practice? An assessment was sent just before I left for seven weeks at sea. Owing to a postal delay, it arrived after I had gone, and I was therefore unable to deal with it in the proper time. But on informing the income tax authorities, they promptly remitted the period and allowed me to carry on exactly as if I had done everything at the proper time. Will the noble and learned Lord please confirm that that is the practice, and that it should be encouraged?

My Lords, I am indebted to the noble Viscount, who has given us a practical demonstration of the application of Section 49.