HC Deb 26 June 1928 vol 219 cc229-31
47. Lieut.-Colonel JAMES

asked the Financial Secretary to the Treasury on what authority Income Tax was deducted from the award of £8,000 awarded by the Royal Commission on Awards to Inventors to Mr. Martin Hale, seeing that Mr. Martin Hale had expended a sum exceeding the sum awarded in law costs, and that a firm incurring legal expenses in the collection of a debt is exempted from Income Tax in respect of those expenses; and why, in addition to the Income Tax deducted, claims for Super-tax on the award are now being advanced against Mr. Hale?

Mr. SAMUEL

Income Tax was deducted from the award to which my hon. and gallant Friend refers, in accordance with the provisions of Rule 21 of the General Rules in the Income Tax Act, 1918. As regards the second part of the Question, Super-tax is chargeable on the total income of an individual as computed for Income Tax purposes, including income which is chargeable to Income Tax by way of deduction.

Lieut.-Colonel JAMES

Is it a fact that Income Tax is not levied against a firm which has to pay legal expenses in connection with the collection of debts? I do not think that that part of the question is covered by my hon. Friend's answer.

Mr. SAMUEL

That is another question, but I have no doubt that, when the Income Tax in respect of this gentleman was computed, all the points raised by my hon. and gallant Friend were taken into consideration.

Sir GEORGE HAMILTON

Was alowance made for this gentleman's legal expenses in patting forward this claim?

Mr. SAMUEL

I cannot answer that question specifically, but I have no doubt that, when the amount assessable to Income Tax was fixed, all these claims were considered by the Income Tax officials, and that, if they were allowable, the were allowed.

Major COLFOX

Surely, such payments might legitimately be considered to be capital sums and not income, and, therefore, free of tax?

Mr. SAMUEL

The whole case was governed by the provisions of Rule 21 of the General Rules in the Income Tax Act, 1918, and we are bound to carry out the law.

Mr. MACLEAN

Did the Income Tax Commissioners look upon this sum as being income for the year, or was it spread over several years?

Mr. SAMUEL

That I could not say without notice.

Mr. HORE-BELISHA

Can the hon. Gentleman say how much of this £8,000 Mr. Hale got, and how much the Treasury got?

Mr. SAMUEL

That, again, I could not say without notice.