HC Deb 20 September 1909 vol 11 cc182-6

(1) If any individual who has been assessed or charged to Income Tax, or has paid Income Tax either by deduction or otherwise, claims and proves in manner prescribed by the Income Tax Acts that his total income from all sources, although exceeding one hundred and sixty pounds, does not exceed five hundred pounds, and that he has a child or children living and under the age of sixteen years at the commencement of the year for which the Income Tax is charged, he shall be entitled, in respect of every such child, to relief from Income Tax equal to the amount of the Income Tax upon ten pounds.

The expression "child" and the expression "children" in this provision includes stepchild or stepchildren, but does not include illegitimate child or illegitimate children.

(2) Any relief under this Section shall be given either by reduction of the assessment, or repayment of the excess which has been paid, or by both those means, as the case may require.

(3) Sub-sections (2) and (3) of Section nineteen of the Finance Act, 1907, shall be construed as if this Section were mentioned therein as well as Section eight of the Finance Act, 1898, and Section fifty-four of the Income Tax Act, 1853, and the provisions of the Income Tax Acts, which relate to claims for exemption, relief, or abatement, or the proof to be given with respect to those claims shall apply to claims for relief under this Section, and the proof to be given with respect to those claims.

Mr. HICKS BEACH moved, in Subsection (1), to leave out the word "ten" ["he shall be entitled, in respect of every such child, to relief from Income Tax equal to the amount of the Income Tax upon ten pounds"].

If you are going to make any concession at all you should make it fairly substantial. I do not know what is the name given by the Chancellor of the Exchequer to this Clause, but I think it introduces a rather curious definition of the value of a child. If you take the actual meaning of the Clause, it is that a man with an income under £500 a year is allowed an abatement for each child of £10. The tax on that amounts to 7s. 6d., which is the exact equivalent to the Dog Tax. You are in this position: In the eyes of the Treasury Officials the value of each child under 16 is the exact equivalent of the Dog Tax. I should like to see a child accounted as of more value than a dog in our system of taxation, and therefore I propose to give a child the value of two dogs.


I agree there is a good deal to be said for increasing the age from 16, but, after all, that would involve a much larger sum than I can possibly afford to give up, after the very numerous concessions I have made in regard to other matters.


This is not an Amendment to increase the age, but to raise the amount of the deduction allowed from £10 to £20 per child.


Very well, the same argument will do for that as if it were a case of altering the age of the child. It is purely a question of money. If you raise the amount of the deduction to be made in respect of each child under 16 from £10 to £20, naturally it would involve doubling the total cost of the allowance. I think it is within the recollection of the Committee that I said this would cost the State half a million, and I cannot possibly consent to make the loss into a million. I think this allowance was first of all recommended by Mr. Pitt, and now that I have given it practical effect, I think hon. Members will find that in its results it is a more substantial allowance than they imagine.


I should like to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. HICKS BEACH (for Lord Willoughby de Eresby) moved at the end of Sub-section (1) to insert the words "Provided that where the parents of any illegitimate child or children shall, after the birth of such child or children, have married each other, such illegitimate child or children shall be included in the expression 'child' and 'children.'" I move this Amendment because I think we ought to treat England and Scotland in the same way.


I am prepared to accept this Amendment.

Question proposed, "That the Clause, as amended, stand pant of the Bill."


I wish to ask the Chancellor of the Exchequer whether he will take particular care to see that this concession is not hampered by stringent conditions in regard to application for the allowance of £10. Anybody who knows anything about the Inland Revenue is aware that they generally issue instructions about such matters, and create as many difficulties as possible, in order to prevent full advantage being taken of a concession. We have had an experience of those difficulties in regard to the two-and-a-half per cent discount. I do not want to see the same kind of thing repeated in the ease of this allowance, because you will be dealing with people who are not so sure of their ground as those who claim discount in regard to Income Tax. I do hope the Chancellor of the Exchequer will see to it that this concession is not hedged round and restricted by too many stringent conditions.


I wish to raise a question of some little importance which arises out of the somewhat exaggerated amount of legislation by reference contained in Sub-section (3) of this Clause. The point I want to call attention to is this. I think the Sub-section carries out something which is not entertained by the Government, and certainly is not indicated on the fact of the Clause itself. The Clause professes to give to everybody who has an income of under £500 a certain allowance per child. In Sub-section (3) we have a reference to the Finance Act, 1907, Clause 19, which again contains references to the Finance Act of 1898 and the Income Tax Act, 1853. If you look at Section 19 of the Finance Act, 1907, you will see that the whole of the latter pant of that Clause, in which it is proposed to include a reference to the Section we are now discussing, is governed by the word "acceptance," and that clearly limits the application of the Clause, so far as I read it, to earned incomes only. The question I want to ask the Chancellor of the Exchequer is whether he intends that Clause 49 of the present Bill should be limited to earned incomes only? Probably I am wrong, but I believe the effect of these references backwards and forwards is that Clause 49, being referred to in the way it is, is limited in its operation to earned incomes.


That is not the case. This Clause is intended to include both earned and unearned incomes. As a matter of fact it does include them. The Clauses referred to by the hon. Member certainly do not have the retrograde effect suggested, and therefore no apprehension need be entertained on the point. If the hon. Member can point out to me either here or later on that it will have that effect I shall be very glad to put the matter right. With regard to the hon. Member for Ayr (Mr. Younger) who raises the question of the 2½ per cent. discount, and states that difficulties are placed in the way of people obtaining it, may I say that I think Scotchmen are the only people who get that 2½ per cent. They manage somehow or other to circumnavigate all the regulations of the Inland Revenue; but what Scotchmen can do seems to be beyond either the intelligence or the energy of poor Southerners.


The right hon. Gentleman knows why. It is because our notices asking for payment are issued in October, while notices to Englishmen are never issued until the end of the year.


I am very glad to hear that we are getting some advantage over the Scotchmen. As to the regulations, I think they are as simple as they possibly can be, and I am very anxious that they shall be sympathetically administered. I am certain also that that is the view of the Inland Revenue.


I beg to move "That the Chairman do report Progress, and ask leave to sit again."

Committee report Progress; to sit again to-morrow (Tuesday).

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