HC Deb 11 May 1863 vol 170 cc1545-55

Bill considered in Committee (on Re-Committal).

(In the Committee.)

Clause 2 (Provisions of former Acts to apply to this Act).


said, he wished to move an Amendment on Clause 2, the object of which was to relieve railway companies from certain grievances, one of which was that they were not assessed to the income tax by the local authorities, as other parties were, but by the special commissioners in London. He could not but complain of the rigorous way they were dealt with, and of the trouble and expense to which they were put in having to correspond with the Court of Commissioners in London. In his opinion, railway companies ought to be put upon the same footing as other companies as to assessment. Another grievance was, that railway companies were made responsible for the income tax of their servants. One man might be employed at certain wages, and another succeed him at different wages, but under any circumstances that might occur the companies were made liable for the recovery of the tax.


said, the noble Lord (Lord Robert Cecil) had given notice of an Amendment in the interest of the smallest class of taxpayers which involved exactly the converse of the objection which had been made by the hon. Gentleman to the assessment on railway companies, and showed that the trouble of corresponding with the special commissioners was not so great as he feared. For his own part, he thought that railway companies ought to be re-assessed year by year. That would not entail any inconvenience or expense to the companies, as special commissioners were sent down from London for the purpose. He believed the real objection of the hon. Member was to the course taken by the commissioners in deciding what were profits and what were not. The servants of railway companies were already placed on the same footing as other servants in respect of being placed under schedule E, which ought to include the servants of all incorporated and joint-stock companies. With regard to railway companies and their servants, the liability rested, so far as regarded engine drivers, upon the principle that the engine driver was so essentially and rapidly migratory, that it was practically impossible to touch him, unless through the company. It was true that £100 and £150 were the two sore places in the working of the income tax, and when he ventured to make to Parliament the proposal for easing that class of incomes, the engine drivers was one class that he had specially in view. He hoped, therefore, there would be no disposition to press for a change until they had had a year's experience of the working of what he might call the new system with regard to incomes between £100 and £200 a year.

Amendment, by leave, withdrawn.


said, he wished to call the attention of the right hon. Gentleman to the position of the local assessors, whose receipts in the shape of poundage had, owing to recent changes, been so greatly reduced as to render their case one of considerable hardship. Those officers were possessed of the requisite local knowledge for making the assessments, and had given no offence in the discharge of their duties. It was not desirable, therefore, that they should be driven to grow disgusted with their situation. With reference to the question of re-assessment, he had since he last addressed the House upon the subject ascertained that in one county of Scotland as much as £1,500 had been lost in consequence of there being no re-assessment under schedule A. In another county there actually was a re-assessment last year.


said, he desired to ask whether he was right in supposing that there was to be no re-assessment under schedule A that year.


said, that there was no intention of making a re-assessment that year under schedules A and B. The rule had been to have a re-assessment under those schedules every three years, and he was so convinced of the trouble, vexation, and annoyance which would be caused by an annual reassessment, that he would not recommend to the House a departure from that rule. He was not acquainted with the case referred to by the hon. Baronet. [Sir JAMES FERGUSSON: It was Haddingtonshire.] As to the payment of assessors, all he could say was, that while it was of course desirable that they should receive a fail-remuneration for the labour which they performed, it was undesirable to pay them in the years in which they had little or nothing to do for those in which they had duties to discharge.


said, he fully agreed with the Chancellor of the Exchequer as to the trouble occasioned to the taxpayers by the re-assessment of a whole county, and hoped that no alteration would be made which would render re-assessments more frequent.


said, that in Scotland, where there was a valuation roll, the re-assessment was made without difficulty or trouble. He hoped that when a fresh assessment took place there would be no disposition to depart from the usual practice of assessing by local officers.


said, he had no hesitation in giving that assurance; and if any change should be considered necessary, the fullest notice would be given.

Clause agreed to.


said, he rose to move the insertion of a clause altering the mode of appeal in the case of persons assessed under £150 per annum. He should not have troubled the Committee had not petitions in favour of his clause been presented from numbers of small tradesmen in the City of London, Westminster, Marylebone, Tower Hamlets, Bilston, Brierley Macclesfield, Nantwich, Crewe, Newcastle-on-Tyne, Birmingham, Manchester, Darlington, Sunderland, and many other places. The complaint of those Petitioners, who were persons having incomes of less than £150 per annum, was, that having been charged as if they possessed a sum which would bring them under the whole weight of the income tax, they had to go a considerable distance to defend themselves before the local Commissioners; while, if they had the same power as was possessed by other classes, they might appeal in writing to the special Commissioners, who, if they were not satisfied, would have to go to them instead of their going to the Commissioners. They also wished for that opportunity of appealing to the special Commissioners, because they, like their neighbours, were interested in keeping their affairs to themselves, and were as liable as their betters to be injured in their trade by any sudden and indiscreet revelations. It was on these grounds that he moved the clause of which he had given notice. He could not resume his seat without pressing upon the right hon. Gentleman the Chancellor of the Exchequer the suspicion which his words tended to refute, but which had been suggested to him from many quarters, that there was a great deal of hardship in the mode in which the income tax was levied. He had received complaints both from the borough which he represented and from other parts of the country of the severity with which the surveyors carried on the business of surcharging; and if such complaints were allowed to continue unnoticed and unredressed, they could not but produce a most injurious effect. It was very unwise to bring the income tax into so much disrepute by the disagreeable manner in which it was levied. In order to illustrate the feeling which prevailed concerning it, he would quote the following protest of seventeen taxpayers in the northern division of the county of Northampton, which was contained in a recent return which had been made on the Motion of the hon. Member for Northamptonshire (Mr. Hunt):— We whose names are hereunto affixed beg to express our surprise at and condemnation of the arbitrary manner in which our returns made under the requirements of the Property and Income Tax Acts have been surcharged, whereby in many instances agricultural tenants have been necessitated either to pay tax on a much higher rental than they pay to their landlords (or than their land will bear), or to appeal against their assessment, at great loss of time, inconvenience, and expense. We are willing to allow all reasonable latitude to the officers having charge of the collection of the revenue of our Government, and to allow that it is right to guard against all attempts to defraud it, but submit that it is neither reasonable nor just to put the taxpayers of this part of the country to such great, and in many instances unnecessary, inconvenience as is involved in the present proceeding of the surveyor of taxes of this district. He believed that the discontent thus manifested, instead of being exceptional, was very general. He moved the following clause:— On and after the passing of this Act so much of section 130 of the Act passed in the fifth and sixth years of the reign of Her present Majesty, chap. 35, intituled 'An Act for granting to Her Majesty Duties on Profits arising from Property, Professions, Trades, and Offices until the 6th day of April 1845,' as relates to persons assessed to the income tax under £150 per year shall be and the same is hereby repealed; and every person sc assessed or charged shall, if he think fit, appeal to the Commissioners for special purposes, upon giving notice thereof in writing to the inspector or surveyor within the time limited for notices of appeal, and thereupon every such appeal shall be heard and determined by two or more of the Commissioners for special purposes.


said, he had heard many complaints similar to those stated by the noble Lord, and he hoped the right hon. Gentleman would admit the clause, and so remove some of the difficulties attending the imposition of the tax. Under the existing system persons had to travel many miles to have their appeals attended to, and in consequence of the large number to be disposed of, they had some- times to perform the journey twice. It was enough for people to have to pay the tax without being put to unnecessary inconvenience in obtaining just treatment.


observed, that the clause would remove two hardships of which taxpayers now complained—that of having to expose their affairs publicly before their nearest neighbours, and that of having to travel a considerable distance to attend the court. In his own county considerable discontent existed as to the existing system, especially on the part of small freeholders who did not come within the income tax. He would suggest that much inconvenience would also be obviated if the Chancellor of the Exchequer would direct the assessors to ask in their papers whether or not property was mortgaged, and would consent, that when there was a new assessment, the first collection should be under the old one.


said, he could confirm the statement made by the noble Lord with reference to the discontent which existed in Norfolk on occount of the manner in which the tax was levied.


said, he could corroborate the statement of the hon. Member for Northamptonshire (Mr. Hunt), that great inconvenience would be saved if the question were distinctly put whether or not a property was mortgaged.


said, it was the desire of the Government not to multiply re-assessments, but to go on for two years at a time, at some loss to the revenue, rather than subject people to unnecessary inconvenience. He was anxious that all who had complaints against the revenue officers should bring them forward, in order that they might be inquired into. The taxpayers happily possessed the power of keeping the ministers in order by calling upon their repretatives to bring their grievances before the House. With regard to the particular point under discussion, he came to a conclusion very different from that of the noble Lord and his hon. Friend (Mr. Williams). Some hon. Gentlemen seemed to think that it was in the power of the Government to levy the income tax in such a way as to be perfectly agreeable. That was quite a mistake. The process of extracting money from the pockets of the ratepayers was much more analogous to the operations of the dentist on the mouths of his patients than to any proceedings which could be carried on in an agreeable manner. That would sound like heresy to hon. Members who held, that as soon as all taxation was direct, it would become easy and pleasant, That was a view to which he could never attach himself. Long experience showed that vigilance was necessary on the part of the revenue officers, because the bulk of men were endeavouring to escape from the payment of taxes. They must not forget the disclosures which were frequently made, as in the case of the people in Cannon Street, who some years back made returns to the income tax exactly one tenth of the amount of those which they laid before a jury when claiming compensation. He felt bound to say that definite complaints against revenue officers were exceedingly rare. All that could be done by judgment, prudence, and moderation on the part of the officers of Inland Revenue ought to be done. Those gentlemen always laboured in that sense, and would not be honest if they did not; and he believed that the spirit in which the officers of the revenue endeavoured to act was a spirit of moderation and forbearance as well as vigilance. With regard to the particular proposal of the noble Lord, he would observe, that notwithstanding that the sum of £150 was mentioned in the clause, the Committee, as the limit of the income tax was carried down to £100, were now really concerned only with the case of persons having incomes under £100 a year. He felt some difficulty in meeting statements in regard to points of detail connected with the special working of a tax, when the parties never thought fit to lay those statements before him. He heard of them for the first time on a proposal being brought forward in that House, and thus no opportunity was afforded him of discussing them with the officers of the Board of Inland Revenue. He felt great difficulty in committing himself, by a conversation in that House, to any alleged facts or proceedings. At the same time, he was sure the noble Lord would feel that it was not desirable to press upon the Committee such a change as he proposed in what, from the first, had been a standing rule in the administration of the income tax, until an opportunity was afforded of fully investigating the statements on which the proposal was founded. With regard to persons claiming exemption on the ground of having less than £100 a year, he apprehended that they were probably under some misapprehension as to the kind of relief they would obtain in any case from being: allowed to appeal to special commissioners. The principal point of complaint was, that they had to travel many miles to exhibit the state of their affairs to the local commissioners. He quite admitted that the travelling was a serious inconvenience to persons of small means, but that would not be avoided by the adoption of the noble Lord's clause, for it would not be possible for special commissioners to hold a meeting in every village; and they could not be carried nearer to the doors of the people than the spots where the local commissioners at present sat. The noble Lord truly said that many of those persons were very anxious that there should be secrecy as to the state of their affairs; but he wished to point out the distinction between the case of people claiming total exemption and that of persons endeavouring to ascertain in discussions with the commissioners the precise amount they were to pay. A man paying the income tax might have £100 or £100,000 a year, and it might be of the utmost importance to him that it should remain hidden from the world on which of those two sums he paid, or that the point between them at which his income stood should not be known. The case of a man who claimed exemption was totally different; and if his income was less than £100 a year, the commissioners did not inquire whether it was £90, £80, or £70. With regard to the fact of exemption there could be no secrecy. The tax gatherer, in collecting the income tax, called at the doors of A, B, and C, and not at the door of D. Consequently, it became known that D did not pay income tax, and therefore no secrecy existed as to the only fact within the cognizance of the commissioners—namely, that D had less than £100 a year.


said, all he wished was to call the attention of the right hon. Gentleman to the grievances which he believed the Bill would inflict upon certain classes of the public in the hope that they would be taken into the right hon. Gentleman's consideration. It was not the mere disclosure of his income that a man disliked, but what he disliked was to be compelled to make that disclosure before a number of persons who were sitting around him in order to secure his liability to as high an income tax as they could exact upon the evidence which was forced from him. Now, a man naturally did not like the world to know his circumstances when he was going down in the world. There were many little details in connection with, his affairs which it might be important for such a man to keep from the public eye. The grievance of such a person might not, however, be so great as that of individuals whose transactions were on a much more extensive and important scale. The right hon. Gentleman said that the question of £150 a year, as the point at which, exemption ceased, was no longer in existence. Now he (Lord Robert Cecil) had looked most attentively into the two Acts on the subject; and, as far as his judgment went, the Bill of the right hon. Gentleman incorporated the clause of the Act in which £150 a year was made the lowest point for taxation Consequently, some confusion upon the matter would, he thought, arise. Passing from that point to a much narrower question, he wished to explain the reason why he could not lay before the right hon. Gentleman those specific cases of hardship to which he had referred in general terms. When a man was going down in the world, he naturally felt the hardship the greater, and the injustice or over-zeal of the surveyor pressed upon him with peculiar severity. That was the very time at which least of all he wished to have his circumstances published to the world; that was a time when he felt it was all-important to his interests to have his affairs kept as secret as possible. Under such circumstances, he (Lord Robert Cecil) should never think of divulging the details of his case. He therefore hoped that the right hon. Gentleman would not draw from the mere absence of details, or the facts not specifically mentioned, the conclusion that there were no grounds for the complaint, or that the officers were working the Act as quietly and as gently as possible. He believed that the taxpayer was perpetually trying to escape from the hands of the surveyor, and that such cases caused a reaction on the part of the surveyor, who, in the excess of his zeal to counteract such a system, allowed himself sometimes to be betrayed into acts of hardship and injustice.


said, he thought his noble Friend was under some misapprehension. The Income Tax commissioners did not hold an open court. Three commissioners, or two at all events, sat in a small room with their clerk and surveyor, and those gentlemen were sworn to secrecy. As far as the commissioners were concerned, they did not take much interest in small incomes, and there was no reason why the recipients of those incomes should not state freely their complaints. The surveyors had very difficult duties to discharge, but they readily paid attention to suggestions by the commissioners. The proper check was in the hands of the commissioners, who had only to intimate with firmness their opinion when they found the surveyors acted harshly, as he had known them sometimes do in assessing profits under Schedule D. He thought, however, that, upon the whole, the tax was levied with as little trouble and as much care as money could possibly be extracted from any one.


said, he was sure the class of persons who had small incomes would feel very much obliged to the noble Lord for calling attention to the subject. He was glad to hear the assurance which had been given by the Chancellor of the Exchequer, and was convinced that if the pain was reduced to a minimum, the object of the noble Lord would be realized.


asked whether any encouragement was given to those officers who collected the tax without harshness, and whether any discouragement was given to those who added unnecessarily to the irritation of the persons assessed.


said, that those officers who made unjust charges were placed in an unfavourable position with regard to promotion. The hon. Member for Northampton had suggested that a column should be inserted in the Schedule in order that reductions claimed in respect of mortgages might be specified. Now, he asked the House to consider what would be the consequence of calling upon those who possessed property to declare the amount of their mortgages. He thought such an arrangement would not be regarded with approval.


said, that his experience as a Commissioner convinced him that instead of the surveyors too strictly discharging their duty they were too lax in that respect. He never knew an instance of a person being really charged too much, and the mistake not rectified.


said, he was not sorry that his noble Friend had called the attention of the Chancellor of the Exchequer to the subject. He could not say that he was hopeful of any of the difficulties to which he had referred being amended; but the right hon. Gentleman had promised to turn his powerful and acute intellect to the matter; and as he could split hairs better than 19–20ths of the House of Commons, he might devise some mode, in consultation with the officers of Inland Revenue, by which some of the irritation produced by those blisters might be lessened. If the right hon. Gentleman succeeded, he should give him unusual credit for it, but his own opinion was that the irritation was incidental to the tax itself. As the right hon. Gentleman had said, the greatest difficulties occurred in cases of exemption; but when persons claimed exemption, they ought not to grudge a reasonable amount of trouble to secure it. He had never seen anything unfair, harsh, or capricious in the conduct of the surveyors, but it was easy for any one to send a letter by post, calling attention to any particular case, when the wrong would probably be remedied. The surveyors were sure to be hated by every one, and he thought they went out of their way to relieve the public as far as possible from a good deal of trouble in connection with this odious tax. The commissioners had to find out whether the butcher, the baker, or candlestick-maker had an income of £98 or £100 a year. A Chancery suit was nothing to it. They had to find out how much profit was made out of a sack of flour, or when a beast was killed how the profit was affected by the weather and by the state of the markets, to say nothing of that blessed item bad debts. Or, perhaps, these wretched commissioners had to discover how much profit a schoolmaster with nine children made out of his boys, by an inquiry into how many pounds of meat were consumed by the boys, some of whom had large appetites, some small appetites, and some no appetites at all, and how many maid servants were necessary for the boys and how many for the nine children. All these questions had to be discussed, and he was bound from his experience to bear testimony to the ability and forbearance with which the revenue officers carried on their work and assisted the commissioners in arriving at a decision.

Clause withdrawn.

House resumed.

Bill reported, without Amendment; to be read 3° To-morrow.