HC Deb 28 November 1893 vol 18 cc1894-6
MR. JACKSON (Leeds, N.)

I beg to ask the Chancellor of the Exchequer whether he is aware that, notwithstanding the current rate of Income Tax is 7d. in the £1, the Bank of England authorities have deducted Income Tax at the rate of 8d. in the £1 from certain dividends payable in October and November last, and whether he is aware that the excess has been returned in some cases and not in others; and will he state on what grounds, in cases where a half-year's interest or the greater part of it accrued during the financial year 1892–3, but was paid during the present financial year, the Bank of England have been entitled to deduct 7d. in the £1, whereas Railway and other Companies, mortgagors, &c, could only legally deduct 6d., or a fraction over 6d., in the £1?


From the half-yearly dividends payable in October and November the Bank of England have deducted Income Tax at the rate of 8d. in the £1, because the corresponding dividends for the earlier half-year, though payable after the 7d. tax had been imposed, only suffered deduction at the rate of 6d.,;is the warrants for their payment had already been prepared before the Resolution had passed the House of Commons. To prevent injustice arising from this arrangement, holders of Stocks purchased since 1st May last will be called upon only to suffer deduction of 7d. from their November dividends. This procedure has been followed by the Bank on former similar occasions. The payments referred to in the second part of the question are assessable under Schedule C, and therefore are chargeable, when payable, at the rate in force for the year in which they become due and payable. The profits of Railway and other Companies are covered by assessments under Schedule D., and mortgage interest by assessments under Schedule A. In both these latter cases the deduction is at the rate, or rates, in force during the period in which they have been accruing. On this matter I would refer the right hon. Member to the Customs and Inland Revenue Act of this year, Section 6; to Section 89 of the Income Tax Act, 1842; and to Section 15 of the Customs and Inland Revenue Act of 1864. The practice at present pursued is that which has been invariably followed.


Can the right hon. Gentleman say whether there is any difference made in the treatment of interest which is the result of loans on mortgages to Corporations and the interest on money lent to Corporations in exchange for Stocks?

MR. POWELL WILLIAMS (Birmingham, S.)

May I ask whether the right hon. Gentleman does not think it desirable that there should be a uniform practice under which the Income Tax should invariably be deducted for the period during which the income had accrued?


It would be a very serious thing to alter the Income Tax law in that respect, which has been in force for 50 years. The principles to which I have referred are those which are established in the Act of Sir Robert Peel of 1842. I would rather not answer the question of the right hon. Member for Leeds without very careful consideration. The answer I have given has been carefully considered. If the right hon. Gentleman looks at the Acts to which I have referred, and thinks they do not give him the information which he wishes, and will put another question on the Paper, I will take care that the question is answered after careful consideration.