§ MR. DALZIEL (Kirkcaldy Burghs)I beg to ask Mr. Chancellor of the Exchequer whether he will kindly explain how it is that a servant of a limited company is not allowed for income tax purposes to return his income on the basis of an average of the preceding three years, but must pay on the current year, although the company itself may return a three years average and also servants of private firms.
§ SIR M. HICKS BEACHIt is the practice to allow clerks, travellers, ware- 1236 housemen and other subordinate employés of public companies the benefit of the three years average for income tax purposes. On the other hand, directors, secretaries, managers, and other persons holding a distinctive office are charged—as required by law—on their actual salaries, fees, or other emoluments for the year then current. The system of average was devised to meet the case of businesses in which profits are precarious. Incomes derived from fixed and regular salaries, such as are paid to the chief officers of limited companies, do not fall within that category. But it has been thought that it may be extended to the case of subordinates whose employment is more precarious and probably largely dependent, on the volume of business.