§ (1) The Super-tax shall be assessed and charged by the Commissioners for the special purposes of the Acts relating to Income Tax (in this Act referred to as the Special Commissioners).
§ (2) Every person upon whom notice is served in manner prescribed by regulations under this Section by the Special Commissioners requiring him to make a return of his total income from all sources or, in the case of a notice served upon any person who is chargeable with or lable to be assessed to Income Tax under Section forty-one of the Income Tax Act, 1842, or Section 24 of the Customs and Inland Revenue Act, 1890, as representing an incapacitated, non-resident, or deceased person, of the total income from all sources of the incapacitated, non-resident, or deceased person, shall, whether he is or is not chargeable with the Super-tax, make such a return in the form and within the time required by the notice.
§ (3) It shall be the duty of every person chargeable with the Super-tax to give notice that he is chargeable to the Special Commissioners before the thirtieth day of September in the year for which the Super-tax is chargeable: Provided that for the purpose of this provision the thirty-first day of December shall, as respects the year beginning on the sixth day of April, nineteen hundred and nine, be substituted for the thirtieth day of September.
§ (4) If any person without reasonable excuse fails to make any return or to give any notice required by this Section, he shall be liable to a penalty not exceeding 1236 fifty pounds, and after judgment has been given for that penalty to a further penalty of the like amount for every day during which the failure continues.
§ Any penalty under this provision shall be recoverable in the High Court, or in Scotland in the Court of Session.
§ (5) If any person fails to make a return under this Section, or if the Special Commissioners are not satisfied with any return made under this Section, the Special Commissioners may make an assessment of the Super-tax according to the best of their judgment.
§ (6) All provisions of the Income Tax Acts relating to persons who are to be chargeable with duty, assessments, and appeals against those assessments, and to the collection and recovery of duty, and to cases to be stated for the opinion of the High Court shall, so far as they are applicable, apply to the charge, assessment, collection, and recovery of duty under this Section, and the Special Commissioners shall, for the purpose of assessment, have any powers of an inspector or surveyor of taxes, and for the purpose of the representation of the Crown on any appeal before the Special Commissioners, any person nominated in that behalf by the Commissioners of Inland Revenue shall have the same powers at and upon the determination of the appeal as a surveyor of taxes has at and upon the determination of any appeal under the Income Tax Acts.
§ (7) The Special Commissioners may amend any assessment made by them under this Section, or make an assessment or an additional assessment, during any time within the year of assessment, or within three years after the expiration thereof.
§ (8) The Commissioners may make regulations for the purpose of carrying this Section into effect.
§ Mr. WALTER GUINNESS moved to omit Sub-section (3).
§ This Sub-section imposes the duty on anyone liable for the Super-tax of informing the Special Commissioners of the fact. Where people are liable for the ordinary tax there is no penalty if they do not inform the assessors of the fact. Under the Income Tax Act of 1842 the duty lies on the assessors to tax all those who are liable, and penalties are only recoverable where persons neglect to return the forms sent them or return them filled inaccurately. People have got accustomed to 1237 these forms, and I can hardly imagine any man liable for the Super-tax who has not already enjoyed the attention of the assessors. It will cause a great deal of unnecessary trouble to all who are liable for the Super-tax if they have to send in this notice before they get the forms sent to them. This year there will be a delay in getting these forms. Probably, if the finance Bill passes, these forms cannot be got out before the end of December, and it will mean that everybody will have to send in this notice, and that a great many people will not be aware of this provision or will not know to what address to send this information. I object to the principle of this, because it seems to me that the House is rather too willing to create new offences. If one looks through the proceedings in the police-courts one continually finds cases of people sent to prison for merely technical breaches of some new Act passed by this Parliament. The prisons are full of persons who have committed no crime, but are unable to pay fines imposed upon them for quite artificial and newfangled offences. It is most objectionable to create these offences where there is no necessity for it. As people in any case will have to spend a great deal of time, and incur a lot of expense in filling up these returns, I think it will be quite enough to leave them subject to that inconvenience, and not impose on them this new obligation, for which there is absolutely no precedent in our Income Tax law.
Mr. G. D. FABER
It seems to me that if you have Sub-section (3), Sub-section (2) is really not wanted, because Sub-section (3) says that it shall be the duty of every person chargeable with the Super-tax to give notice that he is chargeable, while Sub-section (2) has an elaborate provision about serving the notices upon every person who the Commissioners think has over £5,000 a year. I cannot see any necessity for having both. It seems to me better to have Sub-section 2 and not to have Sub-section 3. I remember, in a discussion before the Income Tax Committee, Sir Henry Primrose rather indicated the procedure laid down by Sub-section 2, namely, that the Commissioners of Income Tax would, if I may use a slang expression, make a shot at all the people over £5,000 a year. He saw some difficulty there, because, assuming as he did, something like 10,000 people with over £5,000 a year in this country, he came to the conclusion that the Income Tax Authorities 1238 would have to make something like 100,000 shots to bring those 10,000 birds into his bag. That is an intelligible procedure. But Sub-section 3 says that every one of the 10,000 hypothetical people have got to give notice to the authority that they are chargeable. What is the good of the Commissioners making the 100,000 shots if under Sub-section 3 the people affected have to give notice. I beg to second the Amendment?
§ Mr. LLOYD-GEORGE
The hon. Member referred to this in the Committee stage, and I mentioned one or two very notorious cases of people who had very large incomes, the extent of which had never been discovered during their lifetime. There was one case of a man worth several millions of money, who I do not think contributed anything. He lived in a small room for which he paid 30s. a week, and it was only after his death it was discovered that his estate was worth over £10,000,000. Those cases are rare. The hon. Member talked of the 100,000 shots, but this is intended for the birds that take cover. We want to make sure of all our birds. Some of them are very fat. There was a case about a year or two ago of a man who died worth about £3,000,000. The Inland Revenue authorities had no reason to believe that he was worth that. He had never informed them of the fact, and they only discovered it after his death. There are cases of that kind which we wish to ascertain. The average Super-tax man is pretty well known, but this Subsection is intended to deal with the case of these exceptional people. The Inland Revenue will find out 99 per cent. of the cases, no doubt, of taxable incomes, but there will be these occasional cases of men living in a small way like poor men, who do not spend their incomes, and who might not inform the Inland Revenue of the amount of their income if there were not a special provision compelling them to do so.
§ Mr. AUSTEN CHAMBERLAIN
I have no sympathy with the millionaire who lives in a room for which he pays 30s. a week, and who conceals all his wealth from the community. I did not know the gentleman who has been referred to, but I know that there are sometimes cases of the kind. I confess I am not surprised at the Inland Revenue knowing nothing about that gentleman. What does this proposal mean? The Chancellor of the Exchequer's 1239 idea that the threat of a £50 penalty will cause these gentlemen to come to the Inland Revenue begging them to assess them for Super-tax is a perfectly absurd hope to cherish. The kind of man who, according to the Chancellor already evades his legal obligations, and that on a very high scale indeed, will find the £50 penalty a very small risk to run and a much less penalty than he would have to pay under the present law, if the Inland Revenue do find out his case, and it is not likely to make him reveal his position. The Chancellor of the Exchequer says that where a man has a taxable income he ought to reveal it. That will carry the Chancellor of the Exchequer a great deal further than he has gone. That will apply not merely to people who are liable to the Super-tax, but to people who are liable to Income-tax at all. The Chancellor of the Exchequer, I observe, has hesitated to apply to them the obligation to serve notice on the Commissioners that they are liable for tax, and the liability to pay a £50 penalty if they do not send in their notice, I doubt whether this is really a very valuable provision. I do not feel myself very strongly about it one way or another, but I hold confidently that it is quite insufficient to cover the particular cases which the Chancellor of the Exchequer has in mind.
§ 7.0 P.M.
§ Mr. ARTHUR FELL
It appears to me that in any case the order of these two Sub-sections is wrong, and that number 3 should be first, providing that it is the duty of everyone chargeable to send in notice, and then the Commissioners when they receive this notice would have the man served with the special forms to fill up. But at present they have to send out special forms to a special number. There are certain other people on the borderlines, and those would be the most frequent cases, and not the millionaires, who, I believe, are pretty well known. The persons who are liable to the Super-tax may, or may not, be served with these notices, but if they receive a paper from the Commissioners with their ordinary Income Tax papers to fill up, stating their income, they would not know how to send it in. I do not think that one of them in a hundred chargeable with this duty would know where to send it in to the Commissioner. I suppose they are to send it in a form of a letter, or some notice that they may or may not be liable, and then when they get their papers they 1240 will be able to see what they have to fill up. As it stands now, certain people are invidiously selected, and others are to be left to send in notices, though they are very doubtful what form to adopt, and, being in doubt, some of them may take the benefit of that doubt. I am quite sure that some better form might be used than that which the Treasury has now adopted.
§ Amendment, by leave, withdrawn.