§ MR. LEAasked Mr. Chancellor of the Exchequer, If it is generally found that insolvent firms have paid Income Tax on fictitious profits up to the time of their failure, and for several years before; whether this arises from the inquisitorial zeal of Income Tax officials working upon the dread of the exposure of their accounts; and, if, having regard to the losses that are known to have occurred in some of the manufacturing districts during the last few years, Surveyors of Income Tax will be instructed to forbear from pressure which tends to compel the payment of Income Tax at the expense of the creditors of the estate?
THE CHANCELLOR OF THE EXCHEQUER (Mr. GLADSTONE)The Question has been put under some misapprehension as to the facts. It is not the fact that it has been found by the Government Department that insolvent firms had commonly paid Income Tax on fictitious profits. That being so, it follows that the second paragraph of the Question also must be answered in the negative. With regard to the third paragraph, I have to reply that pressure compelling the payment of Income Tax at the expense of creditors has not been exercised by the Surveyors. On the contrary, payment is frequently allowed to be deferred pending the result of an appeal at the end of the financial year, the 5th of April, when the true statement of accounts can be ascertained.