HC Deb 17 March 1862 vol 165 cc1597-8

said, he rose to inquire of Her Majesty's Government, Whether any change has taken place in the original decision (1842) of the Board of Inland Revenue that voluntary gratuities to Bankers' Clerks should not be assessed under the Income Tax Act, and the cause of that change, if any? From the time of the original imposition of the Income Tax the practice had been to levy no Income Tax on the Christmas money or gratuities presented to Bankers' Clerks by the customers of Bankers; but he was informed that it had been recently attempted to impose the Income Tax on those sources of income, and that the attempt was confined merely to banking-houses in Westminster. He therefore wished to know whether the Government have sanctioned this demand for Income Tax; and whether they can throw any light on the anomalous state of the law, by which Bankers' Clerks in the City were exempt from this particular application for Income Tax, while a demand for it was made on the Bankers' Clerks in the west end of the town?


said, he knew nothing of any decision having been taken in this matter, the application of which was confined to the limits of Westminster. He was informed that in 1842, before the Board of Inland Revenue existed, and when the duty of collecting the Income Tax belonged to the Board of Taxes, the question arose whether presents to Bankers' Clerks at Christmas and other seasons were liable to assessment for the Income Tax, and the opinion of the Board was that they were not liable to be taxed. In September last, however, the clerk of the Income Tax Commissioners of St. Martin's put, on the part of the Commissioners, a question, not precisely in the terms asked by the right hon. Gentleman, for the purpose of ascertaining whether these annual subscriptions or Christmas money given to Bankers' Clerks were liable to the Tax; and the Commissioners' clerk stated at the same time that the gratuities referred to were received by the bankers, brought to account by them, and distributed among the clerks according to their periods of service. He mentioned these details because this was a matter of construction and not of discretion, and in the construction of law much depended on the particular circumstances. The question was treated as a matter of business by the Board of Inland Revenue who referred it to their legal adviser, who reported that the sums in question appeared to come under the head of profits and gains arising and accruing from the employment of these persons as clerks, and were accordingly chargeable with duty. Consequently, the Board deemed it to be their business to charge the Income Tax on these gratuities. With regard to a matter of law, it was not for him to give any opinion; but his own decided impression was, if there existed error, it was in respect to the decision of the Board of Taxes in 1842.