§ (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 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.286
§ (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.
§ (4) If any person fails to make any return or to give any notice required by this Section, he shall be liable to a penalty of fifty pounds, and after judgment has been given for that penalty to a further penalty of fifty pounds 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.287
§ (5) If any person fails to deliver a return under this Section, or to give any notice required by 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 the general powers and procedure with reference to assessments made by Special Commissioners, and to 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 assessments by the Special Commissioners under this Section.
§ (7) The Special Commissioners may amend any assessment made by them under this Section, or make 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. GEORGE CAVE moved, to add at the end of Sub-section (1), "Provided that in any case in which an appeal is allowed to be made to the Special Commissioners against any assessment of Super-tax, or against any objection of the inspector or surveyor to such assessment, or against any surcharge of the said tax, it shall be lawful for the person assessed or charged, if he shall think fit, instead of appealing to the Special Commissioners to appeal to the Commissioners for General Purposes of the district upon giving notice thereof in writing to the inspector or surveyor within the time limited for notices of appeal to the Special Commissioners, and thereupon every such appeal shall be heard and determined by two or more of the Commissioners for General Purposes who hear appeals in the district in which such appellant shall be chargeable."
The object of the Amendment is to give every taxpayer charged with Super-tax the option of being assessed either by the Special Commissioners, as the Bill provides, or by the General Commissioners; in other words, to extend to the Super-tax the option which exists already in relation to Schedule D taxes. This is a matter of some importance. As the Committee know, under the present system a man is assessed for Income Tax by the General Commissioners—a body established more than 100 years ago to assess
for Income Tax, consisting of independent persons, magistrates and others, who act for the district as General Commissioners for Income Tax. That system continued until 1842, when Sir Robert Peel revived the Income Tax. He was then asked to abolish the General Commissioners and to remit all assessments to the Special Commissioners. He declined to do that, because, he said, you must have an independent body to assess for Income Tax; but he gave the taxpayer the right to be assessed either by the General Commissioners or by the Special Commissioners, who are paid Treasury officials. I want to give the same option to the person assessed for Super-tax. The Bill provides that he shall be assessed by the Special Commissioners—that, is, that the taxpayer shall be assessed by the Crown. I submit to the Committee that that is not a right system. In this case, as in others, the person to be assessed ought to have the right to go to some independent body to have the amount of his assessment fixed. That the General Commissioners are appreciated as the assessing body can be easily proved. For 67 years the taxpayers had the option of going either to the General or to the Special Commissioners. I believe it is the fact that in less than 1 per cent. of the assessments has the taxpayer elected to go to the Special Commissioners. You could not have stronger evidence than that that the confidence of the taxpayer in the General Commissioners is very great indeed. He is satisfied with the way they treat him. They are a body wholly independent of Government control; they stand between the taxpayer and the Crown, and they assess a man fairly. I am told that the appeals against the General Commissioners on points of law are less than 1 per cent. of the total assessments made, and from a Return presented to Parliament some years ago it appeared that out of 175 appeals then tabulated 169 failed. I think that that shows that the General Commissioners have discharged their duties very fairly and very efficiently indeed. Further than that, there has been no kind of friction in the exercise of their powers by the General Commissioners. They are very carefully advised by their clerks, and in a Report published in 1905 the Income Tax Commissioners stated:—
We desire to place on record our opinion that the tax appears on the whole to be levied with the minimum of friction and the maximum of result.
§ I do not think you could have stronger testimony to the efficiency of the General Commissioners for Income Tax. An experiment was made some years ago to test the relative cost of assessments by the Special Commissioners and assessments by the General Commissioners. The result was rather remarkable. According to a Return made to Parliament on the Motion of the late Mr. Hanbury, as to the comparative cost of the two systems, it appeared that the cost of collection by Inland Revenue officials was £1,010, while the cost of collection by collectors under the General Commissioners was £223, or less than one-fourth of the cost of the other system. I think I have said enough to show that at all events the power to go to the General Commissioners is valued by the taxpayer.
I want to insist also upon the fact that only in that way can you have an independent assessment. We have had to say more than once in these Debates that it is not right when the question is what amount an individual is to be taxed, or on what assessment he is to be taxed, that the decision should rest with any officials of the taxing authority. There ought to be a right to go to a wholly independent tribunal for the purposes of assessment. The General Commissioners are an independent tribunal. The Special Commissioners are not. The latter, with the exception of the chairman, are all Inland Revenue officials; they are all paid, very properly; and no doubt they are an efficient body. But my point is that they are not, and cannot be, an independent body. There is only one answer that I have heard to this suggestion. A question was put to the Chancellor of the Exchequer on the point, to which he replied:—
The right of appeal to District Commissioners against Income Tax assessments is necessary and valuable in view of their local knowledge, but this is not required in the case of assessments for Super-tax, which will consist of grouping and marshalling assessments which have already been made, the total income of an individual for the purposes of Super-tax being the total income of the individual from all sources for the previous year estimated in the same manner as for the purposes of exemption or abatements under the Income Tax Acts. Persons liable to Super-tax will, in the great majority of cases, be persons possessed of interests in several localities, and, in such cases, an appeal to the District Commissioners could only be an appeal to the appropriate Commissioners in respect of each local item of income, thus involving great inconvenience and delay both to the public and the Administration.
§ With great respect to the right hon. Gentleman, that is no answer to the case made. Take assessments now in the City of London. Surely nobody will dispute that in that case the income assessed is 290 the income from all sources. I am not talking of Schedule A. Already the General Commissioners assess incomes from all sources. They must do so. With regard to Super-tax, you must assess a man somewhere in some district for the purposes of collection. I do not see at all why the General Commissioners, who already deal with similar cases by the thousand, should not be perfectly able to deal with the assessments for Super-tax purposes. I am afraid to give the figure which I have heard of the thousands of cases with which these Commissioners deal without any objection as far as I know. Super-tax assessments will not be a mere question of arithmetic, as the right hon. Gentleman seems to suggest. There must be many questions arising of great importance to the persons to be taxed, such as what is a man's income, what income is to be included, and at what amount it is to be assessed. I suggest as to all those questions it is far better to give the taxpayer a right of recourse to an independent body accustomed to deal with the matter, which has dealt with similar matters without any objection and at small cost. I press this matter because it is not the first time the point has arisen. Ever since 1842 proposals have been made in the House of Commons to supersede the General Commissioners and to remit assessments to the Special Commissioners.
§ All of them hitherto have failed or have been withdrawn. I strongly press upon Members who are familiar with this subject that they should not consent to give up the really valuable right of independent assessment and hand the duty over to a tribunal appointed by the Government of the day. I do not care about the form in which the question is met, but the form in which I am now moving the Amendment is practically similar, and is framed upon Section 130 of the Income Tax Act of 1842, which gives the option to the taxpayer to have either one or the other of the bodies.
§ Mr. LLOYD-GEORGE
It is not at all a question of form, but a question of substance. I cannot possibly accept this Amendment. I do not in the slightest degree impugn the efficiency or the general impartiality, and certainly not the good faith of the District Commissioners. But they are obviously unsuited as a tribunal to settle this question of a Super-tax. The first reason as to why not was indicated by the hon. and learned Gentleman himself by reference to an answer which I gave on the very subject. These gentlemen, as a rule, derive their income from more than 291 one locality. It would be quite impossible for the General Commissioners to judge of all questions which would arise in the constitution of the income of the person against whom a claim for Super-tax was made by the Inland Revenue. These Commissioners can decide questions of ordinary Income Tax. But when you come to aggregate all these incomes with a view, first of all, of telling whether a man is within the limit or not, and to what extent he should be charged, a purely local tribunal is unfitted for questions of that kind. But my objection really goes far more to the root of the matter than that. The hon. and learned Gentleman talked about the Special Commissioners as if they were not quite an independent or impartial tribunal, and certainly not an independent tribunal in comparison with the District Commissioners. Why not? The District Commissioners may be, and undoubtedly are, a very fair and impartial tribunal so far as the general administration of the Income Tax Acts is concerned, but when you come to consider a question like that of a Super-tax, I think it is really putting a too great a strain upon their judicial capacity to call open them to decide a matter of the kind. In the first place they would be very largely judging in their own cause. In a good many towns there are men who will be liable to the Super-tax who may be on the Commission themselves. At any rate, their associates and intimate friends will probably be Commissioners. But when you come to the Special Commissioners why, I ask, should they not be impartial? They are officially appointed for the special purpose of considering these claims. I think, speaking of the officials in the main, that they discharge their functions with great fairness, great consideration, and with a desire to do justice to the subject. And after all, if they abuse their position in any way, they are liable to be called to account by their Department, and while I do not suggest for a moment that they carry out their duties in fear of their Departments, the knowledge that they may be called to account for any excess or abuse that they may be guilty of has its influence.
§ Mr. LLOYD-GEORGE
The Minister who is in charge of that particular Department is the one who presents their case to the House of Commons. Any hon. Member may bring facts before the House, and the officials can be called to account 292 for anything in the nature of a departure from the most strict and judicial discharge of their functions. Well, now, that is much more true with regard to the Special Commissioners than with regard to the District Commissioners. I do not think it would be possible or fair to leave the District Commissioners to sit in judgment on their friends. That is really what it means in a great many cases. Anyone who lives in a country district may run over in his own mind the people in that town or district who are likely to pay Super-tax. You know them. What does it mean if you leave this matter to the District Commissioners? They are men of great social influence and of great power in a district, and I do not think it would conduce altogether to an absolute judicial scrutiny of incomes if you left them to adjudicate upon the men in their own district—perhaps not altogether their associates, but men of the same class as themselves. I do not think it is fair to put the District Commissioners in that position. I do not think it would work well. You have only got to look at the assessments of these very large houses in order to see how it works at the present time. I do not want to dwell upon that, but I am perfectly certain that, taking the country throughout, they are not assessed at anything approximating their full value. If you look at the difference between the small house of £50 or £60, assessed undoubtedly up to its full value, and compare it with the assessment of these places of enormous value, you will see the distinction. As to the question of appeal, if there is to be an appeal it ought to be considered by the Commissioners who have not already been sitting in judgment upon that particular case. But that matter will come on later. In the meantime I must resist this Amendment, because I think it will destroy the whole valuation.
§ Sir E. CARSON
I am not in the least astonished that the right hon. Gentleman has resisted this Amendment, because it is entirely in keeping with everything the Government has tried to do in preserving under their officers—the taxation of the people without appeal. They have made that clear over and over again in the course of this Bill, and this is simply another instance. There was one observation that the right hon. Gentleman made towards the close of his speech. He supported the claims of the Special Commissioners because the General Commissioners put too low a value on assessments. 293 That I think is a very startling statement. In the first place, say what you will, it is an imputation upon the Commissioners; and, in the second place, it is an indication that he means to have these Special Commissioners for the purpose of screwing up the assessments. And that is a matter which I think will be looked upon as a very serious one by those who are going to be concerned in the Super-tax. Let me ask the right hon. Gentleman—if that is his view of the General Commissioners—that the General Commissioners have valued too low, and that these Commissioners will value higher, how is he going to run the two sets of Commissioners together in relalation to the ordinary Income Tax and the Super-tax? Let me ask him this question: The General Commissioners will assess a man's income as to whether it is £5,000, £6,000, £7,000, or £8,000, or whatever it may be. Then you go before the Special Commissioners to have your Super-tax made. I want to ask the right hon. Gentleman will they have power to increase the £6,000 which have been assessed for ordinary Income Tax? If they have, we shall have a very chaotic kind of procedure, in which your income will be one income for the purposes of the Income Tax and another income for the purpose of the Super-tax. But if that is not to be so, what becomes of the right hon. Gentleman's argument that the General Commissioners value too low, and the Special Commissioners are likely to value higher? How is that going to work out? Surely it is impossible to work it out. We were told all during the discussions of yesterday on other Clauses of the Bill that you must assess for Super-tax exactly the same as you assess for Income Tax. That was the answer given over and over again to the propositions that we put forward, and now, when we come to say that you ought to examine this Income Tax and Super-tax in exactly the same way as ordinary Income Tax, we are told: "No, we must get a tribunal which is really to give higher income to the Treasury than is returned by the ordinary Commissioners." I do not see how the right hon. Gentleman is going to make his system hang together, and I think he will cause a great deal of disappointment among those who are going to be subjected to it. May I bear my testimony—and I had a good deal to do with the body for over five years with the administration of Income Tax law—to the great work and the satisfactory work which was done for the general purposes of Income Tax. I remember having 294 from time to time, naturally in cases where there appeared to be hardship, having many conversations with the managers of businesses as to the effect of Income Tax upon their various enterprises. We had to discuss these matters, and I do not remember ever hearing from the beginning to the end of the many cases with which I dealt a complaint by anybody, nor, indeed, by the Department with which I was brought into contact, as regards the General Commissioners, who do all this valuable work.
Why on earth it should be suggested now by the Chancellor of the Exchequer that you cannot entrust this matter to them because they may have to deal with their friends, although, as he said, the friends are few and far between who have large incomes, I fail entirely to understand. I think the Chancellor of the Exchequer has no justification whatsoever for such a sweeping statement as he made against the Commissioners of Income Tax. What are the Commissioners of Income Tax doing now? Are they adjudicating daily as regards their friends and the various persons with whom they are brought into immediate contact? If the case of the Chancellor has any foundation an fact, which I do not believe it has, for his statement, his argument might go the length of showing that you ought to abolish these General Commissioners altogether, because they are now assessing values for Income Tax daily throughout the length and breadth of the land. There is no shadow of foundation for the statement that because they are coming into contact daily with the people whom they are assessing that they are likely to assess them any lower. I do not think these matters of friendship enter into these judicial relations, and I think it is a matter we may be very proud of in this country. I do not believe if the Chancellor of the Exchequer had to assess my income for Income Tax he would assess it a bit more heavily on me because I happen to be a Member of the Opposition. I should trust him, though I might bate his rules. I do not believe in any of these matters, whether as regards assessment of Income Tax or any other of the quasi-judicial position, I do not believe that any question of corruption arises.
§ Sir E. CARSON
Not one of corruption, but of partisanship of any kind. I do not believe it ever enters into the consideration of the men in these Departments. 295 What then remains of the Chancellor of the Exchequer's arguments? I say nothing at all remains. If you entrust—I do not know how many millions of Income Tax comes in in the year—but if you entrust the whole assessment of that to the General Commissioners I say you have no right to come here and say I am going to give this particular new tax to Special Commissioners, because I believe they will give a higher rate of assessment to the revenue than the ordinary General Commissioners do. I think we want some better answer than what the Chancellor of the Exchequer has given us before we can see what is the real reason for appointing these Special Commissioners to administer this tax. The right hon. Gentleman said: Do you say the Special Commissioners are unfair? I know nothing about them; I am not going to say they are unfair; I make no charge whatever against them, but every official of this kind gets the official mind. It is their whole duty, and they look upon it as a duty. I often had to consider the powers of the Lunacy Commissioners, and I have long since come to the conclusion that the Lunacy Commissioners are of opinion that it would be greatly to the satisfaction of many people in this country to be declared lunatics. I hope the Committee will pause before they make this great change, and endeavour to draw a distinction in the method in which the assessment should be made in the case of the Super-tax as compared with that of the Income Tax.
§ Sir WILLIAM BULL
I would like to ask one question of the Chancellor of the Exchequer. He made a point to the fact that the General Commissioners were in districts, and that they could not have the proper knowledge of a man's income because they knew it only in one place, whereas it might be spread all over the country or the world. How are the Special Commissioners to act? There are eight or nine Special Commissioners and the Board of Inland Revenue Commissioners. What is the procedure? I rather fancy they act in districts, that is to say, that each one has a district, and he deals with those which come within his jurisdiction. If that is not the case, what is the procedure that goes on? Is there a rota; does Mr. A deal with the case one day, and does Mr. B deal with it another? I think that before the Amendment is dealt with we should know what the procedure is. I should say in business the Income Tax Commissioners 296 deal very satisfactorily, and with very great accuracy, in all these matters.
§ Mr. RENWICK
I am extremely surprised that the Chancellor of the Exchequer does not accept this most reasonable Amendment. The very fact that there is an alternative is always a satisfaction. We have heard it said that practically no one objects to the proceedings of the General Commissioners. But if there was no alternative very much greater feeling against the General Commissioners than there is now would be indicated. I speak from the commercial point of view, and I think I am expressing the views of the commercial classes when I say that they would feel very much more satisfied if there is an alternative such as has been proposed by the Amendment than if matters are left entirely to a bureaucratic body entitled the Special Commissioners. I think the Chancellor of the Exchequer cannot have remembered what the Commission in regard to Income Tax says upon this very point. I commend it to his attention. It says that the feeling formerly entertained against the Income Tax as inquisitorial and oppressive has, we believe, largely passed away. The impartiality and secrecy of the local Commissioners deserves confidence in a high degree. Therefore I sincerely hope, from the point of view of getting the confidence of the commercial classes with regard to these new taxes, and from the point of view of getting the question quickly settled on a satisfactory basis, the Chancellor will give more sympathetic consideration to this most reasonable proposal.
§ Mr. EVELYN CECIL
I appeal also very earnestly to the Chancellor to accept the Amendments. I do not think the right hon. Gentleman fully realises the excellent work done by the General Commissioners hitherto. The right hon. Gentleman suggested that they are apt to value too low. That is not the experience of many. On the contrary, they are by no means inclined to let people off cheap, and I think they do their work extremely well. I do not understand why the Chancellor suggested this unduly low valuation. There is no ground for it. I never heard it suggested in any way, and I cannot understand why it is suggested now If it is true that they have done their work badly, why does not the Chancellor of the Exchequer alter their powers in this Bill? He has never thought of doing anything of the kind. There are very good reasons why the General Commissioners command the 297 public confidence, and if they command the public confidence, and do their work well, I really do not understand why the Government should not give the alternative to the taxpayer, if they object to being assessed by the Special Commissioners. There is necessarily a feeling among many taxpayers that the Commissioners serve the Government as their master rather than look after the interest of the taxpayer. I daresay it may be true. It may be that they have thought themselves quite impartial, but you cannot altogether get rid of the feeling in some men's minds that they are the servants of the Government, and it is upon that ground that I very strongly urge the Chancellor of the Exchequer to accept this Amendment.
I am not committing any irregularity in stating to the House that the Special Commissioners consist of five persons apart from the Board of Inland Revenue. There is the chairman of that body; then there is another Special Commissioner who is Surveyor of Taxes, and, therefore, in the service of the Government. There is also the Secretary to the Inland Revenue, who is very obviously in the service of the Government, and two more who are inspectors of taxes. In addition to them there are the other Special Commissioners of the Board of Inland Revenue. I do not make any charge of partiality, but I do say the effect of this proposal will be to create nervousness in some minds as to the impartiality of their judgment. If there was any ground for supposing that the General Commissioners had not done their work well or given impartial decisions, I could understand the Chancellor of the Exchequer's objection, but as he does not suggest any such grounds for not accepting this Amendment, I earnestly hope that he will reconsider his decision.
§ Mr. GEORGE YOUNGER
I do not think any honest taxpayer can do otherwise than agree that these Commissioners are impartial and perfectly fair. From my own long experience in connection with the firm with which I am connected I may say that we have always found the Commissioners perfectly impartial. I understand that one of the main reasons for imposing this new duty upon the Special Commissioners is that it will be a little less inquisitorial to have the inquiries made by a body in London than by the local body. What puzzles me is how these Special Commissioners are to act without in some way taking advantage of the local machinery. How are they to arrive at or 298 check the return which may be made by those who are liable to this tax unless the local surveyors of taxes are brought in. That takes away the particular privacy which the right hon. Gentleman suggested would be one of the special advantages of his proposal.
§ Mr. YOUNGER
Yes. Things leak out in a very uncomfortable way sometimes, and I do not think the secrecy which the right hon. Gentleman thinks would be an appanage to the Special Commissioners would in all cases be found to be as secret as he wishes. I cannot see why anyone who desires to appeal to the General Commissioners rather than to the Special Commissioners should not be allowed to do so. I think these matters in the localities are very carefully looked after indeed, and they take care that everybody is honestly assessed. I wish to know whether the surveyors of taxes are to be imported into this matter or not? If they are I can see less reason than I should have done if some other method had been adopted for refusing the Amendment of my hon. Friend.
§ Mr. HARMOOD-BANNER
I confess I was very disappointed with the speech of the Chancellor of the Exchequer, and I could not understand why in reference to the General Commissioners he should say their action would be destructive of the whole Super-tax. Undoubtedly the right hon. Gentleman thought they would act in a spirit of screening those who pay the Super-tax, and not in the more moderate position of arbitrator, a duty which they have hitherto discharged in a very excellent manner. I claim to know something about this particular case, because, as a chartered accountant, I have very often appeared before the General Commissioners, and I have had a great many cases before the Special Commissioners. Consequently, I am able to say that the statement that they are so local in their knowledge that they cannot deal with the larger matters which come under the purview of the Super-tax is quite contrary to the facts. These General Commissioners in Liverpool consist of the leading merchants, shipowners, railway men, and other traders in the various districts where they reside. One of them is the chairman of the Dock Board in Liverpool, and the others include some of the leading men who are conducting commerce, and they cannot be con- 299 sidered as possessing only local knowledge. The Special Commissioners are mere tax collectors with a good knowledge of Income Tax law, but no knowledge of the ordinary practical character of trading in foreign countries or at home or of manufacturers.
I cannot understand why the General Commissioners should be now put on one side. It should be remembered that the General Commissioners do not sit without having with them the clerk to the Surveyor of Income Tax, who keeps them right as regards the law, and I presume he reports to Somerset House what takes place, so that if there is any great error of judgment notice is taken of it. In the same way the Surveyor of Taxes invariably sits at the same time, and puts his statement of the case most fully before the Commissioners, and he often takes a very strong line. I remember on one occasion when the General Commissioners were taking a view opposite to the advice of the Surveyor, he said he would not sit in the room if they were going to act contrary to his view, and he threatened to report the case to Somerset House. To say that these Commissioners are not assisted by the clerk and by the Surveyor of Taxes is contrary to the facts. The General Commissioners have a thoroughly practical knowledge of business. They know how to assess depreciation, which is one of the most difficult things to be dealt with, and this is knowledge which the Special Commissioners do not possess.
The Special Commissioner is a very excellent man in his way, but when a very large question comes to be considered and it is referred to the Special Commissioner he comes down, and he will deal only with large cases. As regards the ordinary cases, the Special Commissioner does not deal with them, and they are dealt with in a fair way, in regard to which there has been no complaint, by the General Commissioners. Now the General Commissioners are to be entirely overridden, and no option is to be given. You cannot go to the Special Commissioners for the big cases and the General Commissioners for the ordinary cases. The Special Commissioner is a mere legal instrument for enforcing the law in its closest and most oppressive manner, and he is the person upon whom this duty is now to be placed. I cannot think if this tax is to be applied in any way to meet the requirements of the Chancellor of the Exchequer he can 300 adhere to his Resolution. Yesterday we passed a tax without any undue opposition except as regards details, because we recognised that the money had to be raised; but we do not recognise that it is essential that the power of the General Commissioners who know the wants of the locality should be taken away, and we object to the trader being put under the heel of the Special Commissioner. I am astonished at the Chancellor of the Exchequer taking such a very narrow and close view upon this matter, which affect's commercial interests to so large an extent. I hope the right hon. Gentleman wall reconsider his decision.
§ Mr. ROBERT DUNCAN
It appears to me that the Special Commissioner is to have the power of overriding the decisions of the General Commissioners with regard to the details. At present the only important thing is whether every item is taxed or not, and the question of the Super-tax does not come in. The point is whether the Special Commissioners are to override the decision of the General Commissioners in regard to details.
§ 8.0 P.M.
§ Mr. PRETYMAN
I think the Chancellor of the Exchequer must realise that the main fault of this Budget is its great dependence on bureaucracy. The form of the tax in many cases is intricate and will necessitate the interposition of the Treasury in matters which, I think they would prefer should be left to a more independent tribunal, but here you are unnecessarily introducing this fault and you are weakening public confidence, and I cannot see you are getting any equivalent for it. Does the Chancellor of the Exchequer really suggest there is anything unfair, or has he any Departmental information? If so, I think he ought to lay it before the Committee, and it might very much alter our view, but I really do not think the Chancellor of the Exchequer has any right to make that kind of suggestion as an innuendo against the General Commissioners unless he is prepared to support it. He has said nothing to support it and has given no particular case. Surely, as between those hon. Members who hold opposite opinions on this question, it is not necessary for either party to throw stones at either body of Commissioners. We do not desire to throw stones at the Special Commissioners in any way, and I hope the right hon. Gentleman does not desire to throw stones at the General Commissioners. Then why not leave them both 301 alone and why not leave the option? The right hon. Gentleman's argument would be perfectly valid if we asked that the Special Commissioners were to be imitated, and that the General Commissioners were to be the sole judges of this matter; but what we ask is that the same option which exists to-day in regard to the Income Tax should exist in this case. I do not think you will find a higher authority than Sir Robert Peel. What was his reason for retaining the Commissioners? In 1842 he said:—I propose to retain the Commissioners because the policy of the law with respect to this tax, as it was with respect to the Property Tax, is not to make the tax depend upon the mere word of the Government.If Sir Robert Peel had known of the contents of the present Finance Bill, he would have felt it was more necessary to-day that the collection of the tax should not depend upon the mere will of the Government. These Special Commissioners are the servants of the Government. I understood the Chancellor of the Exchequer to say that more secrecy would be obtained; at all events, the question has been raised in the Debate. It is, however, perfectly obvious that so long as the option exists the person to be assessed, if he does not desire his affairs to be known to the General Commissioners, can go to the Special Commissioners. If the Government finds in the working of this Act that any of these difficulties arise, it will always be open to them in any future Finance Bill to refer these matters to Special Commissioners. The Government are doing a great deal to alienate confidence and security, particularly in the minds of those who have large interests. Here is a method by which in some measure confidence in the intentions of the Government may be retained, and I think the Government and the Chancellor of the Exchequer are making a very serious mistake from the point of view of their own policy. The Chancellor of the
§ Exchequer is too apt to look at the immediate petty object and not at what lies behind it, which is really much more weighty. In attempting to gain some small financial advantage, he is losing a great deal more, both morally and financially. This is a case in point, and I hope while there is yet time he will see his way to accept this Amendment and to retain the option.
§ Sir H. KIMBER
The question raised by this Amendment is neither more nor less than whether a man should be entitled to be judge in his own cause. A question arises between the taxpayer and the tax collector as to the amount of tax to be charged. It is referred to these Commissioners, whose functions, whether they be Special or General Commissioners, will be the same. An officer appointed by the Treasury and acting under the instructions of the Treasury is the claimant, and he is to be the judge whether the person charged is to pay or not. That is a subversion of the primary principles of justice. The interests of the claimants is to get the tax. If they do not get in enough taxes they will be reprimanded, and, unless there is an impartial tribunal to whom the taxpayer can appeal, the tax collector may screw up the tax to the point of injustice. The General Commissioners have no interests on one side or the other. They are unpaid and have every reason to do what is right and just. The magistrates who compose these Commissioners are generally esteemed for the high and impartial manner in which they perform their duties, and I think, as a matter of simple justice, the Chancellor of the Exchequer should take every care that the Commissioners have no interests on one side or the other.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 77; Noes, 217.305
|Division No. 693.]||AYES.||[8.10 p.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Craik, Sir Henry||Hope, James Fitzalan (Sheffield)|
|Balcarres, Lord||Dickson, Rt. Hon. C. Scott||Hunt, Rowland|
|Baldwin, Stanley||Doughty, Sir George||Joynson-Hicks, William|
|Banner, John S. Harmood-||Douglas, Rt. Hon. A. Akers-||Kennaway, Rt. Hon. Sir John H.|
|Baring, Cart. Hon. (Winchester)||Duncan, Robert (Lanark, Govan)||Keswick, William|
|Beach, Hon. Michael Hugh Hicks||Faber, George Denison (York)||Kimber, Sir Henry|
|Beckett, Hon. Gervase||Fletcher, J. S.||King, Sir Henry Seymour (Hull)|
|Bridgeman, W. Clive||Forster, Henry William||Lambton, Hon. Frederick William|
|Bull, Sir William James||Gardner, Ernest||Law, Andrew Bonar (Dulwich)|
|Campbell, Rt. Hon. J. H. M.||Gooch, Henry Cubitt (Peckham)||Lee, Arthur H. (Hants, Fareham)|
|Carson, Rt. Hon. Sir Edward H.||Gordon, J.||Lockwood, Rt. Hon. Lt.-Col. A. R.|
|Costlereagh, Viscount||Gretton, John||Long, Col. Charles W. (Evesham)|
|Cecil, Evelyn (Aston Manor)||Hay, Hon. Claude George||Lonsdale, John Brownlee|
|Coates, Major E. F. (Lewisham)||Helmsley, Viscount||Lowe, Sir Francis William|
|Courthope, G. Loyd||Hill, Sir Clement||Lyttelton, Rt. Hon. Alfred|
|MacCaw, William J. MacGeagh||Powell, Sir Francis Sharp||Thomson, W. Mitchell- (Lanark)|
|Magnus, Sir Philip||Pretyman, E. G.||Valentia, Viscount|
|Mason, James F. (Windsor)||Randies, Sir John Scurrah||Walker, Col. W. H. (Lancashire)|
|Meysey-Thompson, E. C.||Renton, Leslie||Warde, Col. C. E. (Kent, Mid)|
|Mildmay, Francis Bingham||Roberts, S. (Sheffield, Ecclesall)||Willoughby de Eresby, Lord|
|Morpeth, Viscount||Rutherford, Watson (Liverpool)||Wortley, Rt. Hon. C. B. Stuart-|
|Morrison-Bell, Captain||Salter, Arthur Clavell||Younger, George|
|Newdegate, F. A.||Sheffield, Sir Berkeley George D.|
|Oddy, John James||Smith, Abel H. (Hertford, East)|
|Parkes, Ebenezer||Stanier, Beville||TELLERS FOR THE AYES.—Mr. Cave and Mr. Renwick|
|Pease, Herbert Pike (Darlington)||Starkey, John R.|
|Peel, Hon. W. R. W.||Staveley-Hill, Henry (Staffordshire)|
|Abraham, W. (Cork, N.E.)||Ferguson, R. C. Munro||Massle, J.|
|Acland, Francis Dyke||Findlay, Alexander||Menzies, Sir Walter|
|Agnew, George William||Foster, Rt. Hon. Sir Walter||Middlebrook, William|
|Alden, Percy||Fuller, John Michael F.||Molteno, Percy Alport|
|Allen, A. Acland (Christchurch)||Fullerton, Hugh||Mond, A.|
|Allen, Charles P. (Stroud)||Gibb, James (Harrow)||Muldoon, John|
|Ashton, Thomas Gair||Ginnell, L.||Murray, Capt. Hon. A. C. (Kincard.)|
|Atherley-Jones, L.||Gladstone, Rt. Hon. Herbert John||Murray, James (Aberdeen, E.)|
|Baker, Sir John (Portsmouth)||Glendinning, R. G.||Newnes, F. (Notts, Bassetlaw)|
|Baker, Joseph A. (Finsbury, E.)||Glover, Thomas||Nicholls, George|
|Balfour, Robert (Lanark)||Gooch, George Peabody (Bath)||Nolan, Joseph|
|Barker, Sir John||Greenwood, Hamar (York)||Norman, Sir Henry|
|Barlow, Sir John E. (Somerset)||Gulland, John W.||Nuttall, Harry|
|Barnard, E. B.||Hancock, J. G.||O'Brien, Patrick (Kilkenny)|
|Barnes, G. N.||Harcourt, Rt. Hon. L. (Rossendale)||O'Connor, John (Kildare, N.)|
|Barran, Sir John Nicholson||Harcourt, Robert V. (Montrose)||O'Connor, T. P. (Liverpool)|
|Barry, Redmond J. (Tyrone, N.)||Hardle, J. Keir (Merthyr Tydvil)||O'Donnell, C. J. (Walworth)|
|Bell, Richard||Hardy, George A. (Suffolk)||O'Malley, William|
|Benn, Sir J. Williams (Devonport)||Harmsworth, Cecil B. (Worcester)||Parker, James (Halifax)|
|Benn, W. (Tower Hamlets, St. Geo.)||Harmsworth, R. L. (Caithness-shire)||Partington, Oswald|
|Bethell, Sir J. H. (Essex, Romford)||Hart-Davies, T.||Perks, Sir Robert William|
|Black, Arthur W.||Harwood, George||Pirie, Duncan V.|
|Bottomley, Horatio||Haworth, Arthur A.||Pensonby, Arthur A. W. H.|
|Boulton, A. C. F.||Hazleton, Richard||Power, Patrick Joseph|
|Bramsdon, Sir T. A.||Healy, Maurice (Cork)||Price, Sir Robert J. (Norfolk, E.)|
|Branch, James||Healy, Timothy Michael||Priestley, Sir W. E. B. (Bradford, E.)|
|Brigg, John||Hedges, A. Paget||Radford, G. H.|
|Brunner, J. F. L. (Lancs., Leigh)||Helme, Norval Watson||Raphael, Herbert H.|
|Burns, Rt. Hon. John||Henry, Charles S.||Rea, Rt. Hon. Russell (Gloucester)|
|Burt, Rt. Hon. Thomas||Higham, John Sharp||Rea, Walter Russell (Scarborough)|
|Buxton, Rt. Hon. Sydney Charles||Hobhouse, Rt. Hon. Charles E. H.||Reddy, M.|
|Byles, William Pollard||Holt, Richard Durning||Richards, T. F. (Wolverhampton, W.)|
|Causton, Rt. Hon. Richard Knight||Hooper, A. G.||Fidsdale, E. A.|
|Channing, Sir Francis Allston||Hope, W. H. B. (Somerset, N.)||Roberts, G. H. (Norwich)|
|Cherry, Rt. Hon. R. R.||Horniman, Emslie John||Robinson, S.|
|Clough, William||Hudson, Walter||Robson, Sir William Snowdon|
|Clynes, J. R.||Idris, T. H. W.||Roch, Walter F. (Pembroke)|
|Cobbold, Felix Thornley||Isaacs, Rufus Daniel||Roe, Sir Thomas|
|Collins, Stephen (Lambeth)||Jackson, R. S.||Rogers, F. E. Newman|
|Corbett, C. H. (Sussex, E. Grinstead)||Johnson, John (Gateshead)||Rowlands, J.|
|Cornwall, Sir Edwin A||Johnson, W. (Nuneaton)||Russell, Rt. Hon. T. W.|
|Cory, Sir Clifford John||Jowett, F. W.||Samuel, Rt. Hon. H. L. (Cleveland)|
|Cotton, Sir H. J. S.||Joyce, Michael||Schwann, C. Duncan (Hyde)|
|Cowan, W. H.||Keating, Matthew||Schwann, Sir C. E. (Manchester)|
|Cox, Harold||Kekewich, Sir George||Seddon, J.|
|Craig, Herbert J. (Tynemouth)||King, Alfred John (Knutsford)||Shaw, Sir Charles E. (Stafford)|
|Crosfield, A. H.||Laidlaw, Robert||Shipman, Dr. John G.|
|Crossley, William J.||Lamb, Edmund G. (Leominster)||Snowden, P.|
|Cullinan, J.||Lamb, Ernest H. (Rochester)||Soares, Ernest J.|
|Dalziel, Sir James Henry||Lamont, Norman||Stanley, Hon. A. Lyulph (Cheshire)|
|Davies, Ellis William (Eifion)||Layland-Barratt, Sir Francis||Steadman, W. C.|
|Davies, Timothy (Fulham)||Lea, Hugh Cecil (St. Pancras, E.)||Stewart, Halley (Greenock)|
|Davies, Sir W. Howell (Bristol, S.)||Lehmann, R. C.||Stewart Smith, D. (Kendal)|
|Dewar Arthur (Edinburgh, S.)||Lever, A. Levy (Essex, Harwich)||Strachey, Sir Edward|
|Dickinson, W. H. (St. Pancras, N.)||Levy, Sir Maurice||Straus, B. S. (Mile End)|
|Dobson, Thomas W.||Lewis, John Herbert||Summerbell, T.|
|Duckworth, Sir James||Lloyd-George, Rt. Hon. David||Taylor, John W. (Durham)|
|Duffy, William J.||Lough, Rt. Hon. Thomas||Tennant, Sir Edward (Salisbury)|
|Duncan, C. (Barrow-in-Furness)||Lupton, Arnold||Tennant, H. J. (Berwickshire)|
|Duncan, J. Hastings (York, Otley)||Macdonald, J. M. (Falkirk Burghs)||Thomas, Sir A. (Glamorgan, E.)|
|Dunn, A. Edward (Camborne)||MacVeigh, Charles (Donegal, E.)||Thomasson, Franklin|
|Edwards, Sir Francis (Radnor)||M'Callum, John M.||Thorne, G. R. (Wolverhampton)|
|Elibank, Master of||McKenna, Rt. Hon. Reginald||Tomkinson, James|
|Essex, R. W.||Maddison, Frederick||Trevelyan, Charles Phillips|
|Evans, Sir S. T.||Mallet, Charles E.||Vivian, Henry|
|Everett, R. Lacey||Markham, Arthur Basil||Walker, H. De R. (Leicester)|
|Falconer, James||Marnham, F. J.||Walsh, Stephen|
|Walter, John Tudor||Whittaker, Rt. Hon. Sir Thomas P.||Wood, T. M'Kinnon|
|Wardle, George J.||Wiles, Thomas||Yoxall, Sir James Henry|
|Waring, Walter||Wilkle, Alexander|
|Wason, John Cathcart (Orkney)||Williams, J. (Glamorgan)|
|Watt, Henry A.||Wilson, Henry J. (York, W.R.)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton.|
|White, Sir George (Norfolk)||Wilson, W. T. (Westhoughton)|
|White, J. Dundas (Dumbartonshire)||Winfrey, R.|
Question, "That those words be there inserted," put, and agreed to.
No. If Sub-section (2) were omitted it would involve the omission of machinery and render the Clause unworkable.
§ Mr. PRETYMAN
May I submit that there are other forms of machinery possible to be inserted in this Clause? This Sub-section stands by itself, and I submit, with all respect, that this Sub-section proposes a particular method of collecting machinery which is totally different from the machinery provided in Sub-section (3). There are, in fact, alternative methods proposed—one in Sub-section (2) and the other in Sub-section (3)—and surely it is within the discretion of the Committee to choose which they prefer. I do not conceive how it is possible that this discussion can be out of order.
§ Mr. LLOYD-GEORGE
May I point out that if this Sub-section were omitted it would involve an absolute breakdown, because it would create a gap in the Clause. It might be possible to move to substitute other machinery, but, to move the omission of the Sub-section altogether is a totally different matter.
§ Mr. PRETYMAN
I submit, on a point of order, that Sub-section (3) by itself would provide sufficient machinery, and that, therefore, it is quite competent to move the omission of Sub-section (2).
§ The DEPUTY-CHAIRMAN again called upon Sir Samuel Evans.
§ The SOLICITOR-GENERAL (Sir Samuel Evans) moved, in Sub-section (2), after the word "sources" ["income from all sources"], to insert the following words: "or in the case of a notice served upon any person who is chargeable with or liable to be assessed to Income Tax under Section forty-one of the Income Tax Act, 1842, or Section twenty-four of the Customs and Inland Revenue Act, 1890, as representing an incapacitated, non-resi- 306 dent, or deceased person, of the total income from all sources of the incapacitated, non-resident, or deceased person."
§ This is a formal matter. The Clause provides that "Every person upon whom notice is served in manner prescribed by regulations under this Section of the Special Commissioners requiring him to make a return of his total income from all sources 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."
§ In this Sub-section the word "person" stands alone, but Section 41 of the Income Tax Act, 1842, and Section 24 of the Customs and Inland Revenue Act, 1890, define more fully the persons who may be called upon to make these returns. In Section 41 of the Act of 1842 these persons are trustees, guardians, or the committees of any persons, infants, married women, or lunatics; while Section 24 of the Act of 1890 enables an assessment to be made on the estate of a deceased person by assessing the executor or administrator.
§ Mr. CAVE
This Amendment with the other Government Amendments on the Paper seem to reframe this Clause altogether. But I should like to know whether the person who, under it, is to be served with a notice calling upon him to ascertain the total income, will, in the event of his being unable to find out that total, be subject to all the penalties sot forth in the latter part of the Clause for not giving information which, after all, may not be at his disposal.
§ Sir SAMUEL EVANS
Of course, if it is impossible to find out the person who is chargeable under this particular Clause, it is so much the worse for the Revenue, but if they do find out the person or persons who are liable to make a return they are bound to make the return so far as they have the information.
Sir SEYMOUR KING
proposed, in Subsection (2), after the word "shall" ["from all sources shall"], to leave out the words "whether he is or is not," and to insert instead thereof the words "if he is."
307 Although this apparently is but a slight alteration in the wording of the Clause, it has a very important bearing upon it. The words proposed to be substituted should be read in conjunction with the proposal which stands in my name later on, to add, at the end of the Sub-section, the words, "provided that any person who is not chargeable with a Super-tax shall be at liberty to make a return of nil and shall not be required to state any particulars of his income in such return." We are approaching a time when this new tax will be enforced under highly inquisitorial conditions, and to that tax we who have to pay must submit with all its unpleasantness. I quite recognise that the Super-tax is impossible, except with inquisitorial machinery, but, as Sir Henry Primrose said, it will be necessary to send out probably 100,000 notices in order to get at the 10,000 or 11,000 people who are liable to the Super-tax. Something like 90,000 people will ultimately not be found liable to pay any Super-tax whatever, and it seems to me monstrous that these people should be compelled to make any disclosure of their affairs beyond the disclosure which is called for at the present time on every Income Tax paper, namely, that if they have no tax to pay they can return the answer "nil." I am not proposing any alteration therefore in the present practice. Apparently in this case there is a desire to obtain information with regard to the incomes of the people who have not to pay this special tax, and with whom the Government have no concern whatever. There will be something like 300,000 people with incomes estimated at between £3,000 and £5,000, and I think it is most undesirable, for many reasons, that the Government should adopt these means to obtain this statutory information.
The appetite grows with eating, and I am afraid if the Government once get before them tabulated the whole of the incomes of the country we shall very soon have a new development of the Super-tax. It is quite obvious, as regards the Bill we are considering, the only thing we have to think of is that the Government should get their Super-tax from every taxpayer who is liable to pay it, and to do that the machinery provided by this Bill is perfectly sufficient. If the Commissioners have reason to think that a man has returned nil when he is chargeable they can assess him, and he renders himself liable to a very heavy penalty if he fails to notify that he is liable to make payment on over 308 £5,000, and in every way the Government are guarded from losing any revenue. The object of this Clause, however, seems to me to be purely inquisitorial, to give trouble to the taxpayer, and to make more odious a tax which at no time is very pleasant, because the Government must not forget that the people who are coming into their net, as far as this tax is concerned, are people who have very large transactions, many of which they do not want their neighbours to know anything about. It will be exceedingly disagreeable for them to disclose every transaction as it is, but I admit that they have to do so if they have an income of over £5,000. But I do not see any reason why a man whose income is under £5,000 should return anything but nil. The Government have their own remedies, and the surveyors of Income Tax throughout the country will have a very shrewd idea of those who are liable to pay the tax, and I do not believe there will be much evasion of it. I believe those who have £5,000 a year will come like lambs to the slaughter, and offer their throats to the butcher. At all events, I can speak for myself. We shall all come and pay our quota. I have not the least objection to paying my fair share of taxation. I did not vote against the Super-tax, and I am entirely in favour of the rich man paying his fair share, but at the same time I do appeal to the Government to make it as-little unpleasant to the taxpayer as possible, and that is the object with which I move the Amendment.
§ Sir SAMUEL EVANS
The matter, which has been very easily and lightly touched upon by the hon. Gentleman, has been fully discussed in the House, and very largely considered by a Committee on which he and I have the honour to sit. If everybody were like the hon. Gentleman I do not think there would be any necessity for these very stringest provisions, but we have to legislate, not only for the good, but for the indifferent—a term which has been used as designating the other category of men in the course of these Debates. Of course, the Committee know perfectly well that by far the largest number of Income Tax-payers have now to make a return, disclosing the whole of their incomes, and we do not think it is unreasonable, in order to make it impossible to avoid the tax, to ask those who have incomes of over £5,000 per annum, and who have an ample opportunity of sending in a return, to send in a return. The hon. Gentleman said this 309 was an Amendment small in form but extremely important in substance, and that is quite true. It is like changing the whole meaning of a sentence by the insertion of the small word "not," and it would be to go back to the state of things before people were required to make a return under the Income Tax Act. If the Amendment were accepted it would make everybody a judge in his own cause as to whether or not he is chargeable. We do not think it is unreasonable, having regard to the whole circumstances, to ask these people who are fortunate enough, as the hon. Gentleman is, to be in a position to make the return to do so, so that they may pay what he is willing to do voluntarily upon a proper basis.
§ Mr. HICKS BEACH
I quite agree that those who have £5,000 a year should make a return, but the point of my hon. Friend is this: Why is it necessary to make 90,000 out of 100,000 people make a complete return of their income when nothing will be taxed upon it at all? It is all very well to say that a considerable number of persons make a return now, but they do so with the view of getting something back; but the people we are now dealing with will make a return, not with the view of getting some money back, but with the result that someting will be put upon them. The man, therefore, who makes a return under these provisions is in a very different position from the man who makes a return now, and the answer of the hon. and learned Gentleman is no answer at all. My hon. Friend suggested that in 90,000 out of 100,000 cases when the Commissioners apply and ask if a man has £5,000 a year the answer is certain to be that he has not got £5,000, and why a man should not be entitled to put upon his return, "I have not £5,000 a year," I cannot see. Surely it is a very fair proposal, and if you are going to carry through this Super-tax with a minimum of friction it ought to be the object of the Treasury and the Inland Revenue to grant this small concession. It is only carrying out a procedure which exists now under the Income Tax Act. It is true that everybody now gets a form sent to him which he is asked to fill up and make a return upon that portion of his income Upon which Income Tax is chargeable. He does so if he has an income on which the tax can be charged, but if he has an income on which the whole tax has been deducted it is only necessary for him to return nil. The Inland Revenue take that return now. 310 Why should they not take it from people with incomes approaching £5,000 a year. They are no more dishonest than people with £500.
If you can trust people with moderate incomes to make their return nil, surely you can trust people with larger incomes to do the same thing. Then with regard to the remedy for evasion. It is all very well to say that the Inland Revenue must have some check upon these people with £5,000 a year. They have got every check under this Bill as it now is. If a man declines to give a return they can, in the first instance, fine him £50, and go on fining him three times every year, and then they can assess his income. If a man declines to give a complete return the Special Commissioners can say, if they choose, "We believe that your income is £6,000 a year, and unless you prove it is; not you will have to pay Income Tax upon that sum." That is what they do now, and is it necessary that people should make a return not only of their actual income, but of their expenditure also? No doubt the balance-sheet is the thing which these Special Commissioners want to get at. But I think it is a very unnecessary and very injudicous thing to ask so many people to make this return. It is not as if you were passing a clause in this Bill to say that it is desirable for the taxpayer to make a complete return of his income. You are not doing that at all, but you are trying to do it by a sort of side-wind in the case of people with incomes approaching £5,000 a year. I hope the Financial Secretary will give more consideration to the Amendment. It is a very fair Amendment, and if it is carried it will do away with some of the friction and inquisition which will make this tax more unpleasant than it might be otherwise.
§ Mr. CAVE
The Solicitor-General referred to two precedents which he said justified this particular provision. One was the Act of 1907, but it is in that case a return of any profits in respect of which he is chargeable or might be chargeable under the Schedule. Here he is required to make a return of profits on which he is not chargeable at all, on the hypothesis, of course, that he has not over £5,000 a year. Our point is that in these oases he should be allowed to make a nil return, and say he has not an income of over £5,000 a year. The hon. and learned Gentleman also said the majority of the taxpayers now return the whole of their income. That is perfectly true, but they 311 do it for the purpose of claiming an abatement, and no one put that more strongly than the present Prime Minister two years ago, when he said:—How are you to get a return from the taxpayer of all his income? Only by giving him an advantage by means of the return. Under a scheme of differentiation you will have no difficulty. It will be to the man's interest to make a declaration. But the moment you tell a man 'you are to declare your income, not for your benefit, but in order that you may be taxed at a higher rate' you find yourself confronted with a good many formidable difficulties.I refer to that answer of the Prime Minister as a sufficient reply to the Solicitor-General's argument. We want the taxpayer to be entitled to say that he has no income exceeding £5,000 a year. You will, of course, have to send forms to ten people for every one that you may hope to catch by means of the Super-tax. You put it on all the nine to give details of all their income instead of saying their income is so much or is under £5,000 a year. That will not make them judges in their own cause, because a man makes that return at his own risk and under very severe penalties If the Commissioners doubt it they can call for particulars under the existing statutes, or they could assess the taxpayer at £6,000, let us say, and then it is for the taxpayer to prove that they are wrong. Here, again, the Government are putting upon a number of people whom they are not going to hit by the tax the trouble and the expense of making a return which in the end will be of no use to anyone. They might permit a nil return where the taxpayer is bonâ fide satisfied that he is not liable to be taxed.
§ Mr. RENWICK
I should have imagined that the Chancellor of the Exchequer, introducing a new proposal of a very drastic character such as this, would have endeavoured to smooth away difficulties instead of making them. The course he has adopted is calculated very strongly to make this tax most obnoxious—not only this Super-tax, but the Income Tax generally. This is equivalent to giving power to ask every Income Tax-payer to make out this return. It is an extraordinary thing that in connection with this Finance Bill a question was asked only to-day to the following effect:—To ask the Chancellor of the Exchequer if he will state whether, after the passing of the Finance Bill, all Income Tax-payers will have to make a return of their income, and if the existing provisions of the Finance Bill do not necessitate these returns, will he introduce an Amendment to make them compulsory.The answer was:—No, they will not do so.312 They refused to make it compulsory that all Income Tax-payers should make this return, and the effect of not accepting the Amendment means that every taxpayer shall be called upon to make a return. If anything is calculated to make a tax obnoxious I think that is. At present if I go into my office I find returns sent in to be filled up. If I go to my private house I am also asked to make a return. Here we are to have a still further form of an utterly unnecessary kind. It would have been much better for the Chancellor of the Exchequer to look upon everyone as honest until he found the contrary, rather to look upon everyone as dishonest, because that is really what he is doing. The result of this return will be to set the brains of clever men at work to see how they can evade the tax, and the result will be that the revenue will suffer instead of benefiting as it might have done if he had met the taxpayers in a more reasonable way.
§ Sir HENRY KIMBER
There is one fact which has perhaps been overlooked by the Chancellor of the Exchequer. In calling upon the taxpayer, as it is quite fair that he should do, to state whether his income is below or above £5,000 a year, we called upon him to say so on the face of a form which contains at the foot of it a declaration that the above statement is true. That statement is made under the penalties attaching to perjury. The penalties for making a false declaration on a Government return are the same as on a statutory declaration, or an affidavit on oath. It appears to me that, in the first instance at all events, the Chancellor of the Exchequer might fairly assume that a man who is supposed to possess more than £5,000 may be believed, at all events, to the same extent as the average of other human beings who have a less income. I think we might fairly take the words subscribed in writing as truth unless there is any well-grounded suspicion for supposing it to be false. In that case the Treasury have two remedies. In the first place if he fails to make a nil return of that kind he can be mulct in a penalty of £50, not for not paying the tax, but for not making the return. That is one penalty he has to meet in the first instance if he makes a return which is wrong. The Commissioners can either surcharge him or proceed in the way described by the hon. Member for Kingston (Mr. Cave). Anyhow, why should we call 313 upon taxpayers whom we believe to be liable for the tax to give particulars at enormous expense and trouble if in the result, as the Chancellor of the Exchequer admits, nine out of 10 are able to prove that they are not liable. The details which a man with an income of £5,000 a year would have to give would be very great, and they would be difficult to get. Most of the tax would have been collected at the source, and he would have to ascertain from all the companies in which he had an interest particulars for the purpose of making a detailed return, subject to a penalty if he made a false return in any particular.
§ Mr. HOBHOUSE
I do not think any further explanation than that given by the Solicitor-General is necessary. I think the whole argument was contained in the speech of the hon. and learned Member for Kingston, when he said that at the present moment taxpayers make a return of the whole of their income when they wish to get an abatement.
§ Mr. HICKS BEACH
The Prime Minister made a very strong speech last year or the year before in reference to the Super-tax, in which he pointed out the great difference between asking a man to make a return for the purpose of getting something back and making a return for the purpose of being charged additional taxation.
§ The answer given by the Solicitor-General was really no answer to the argument of my hon. Friend who moved the Amendment.
§ Mr. ERNEST GARDNER
The Government ought to give us some reason for putting people to the trouble which this proposal will involve. It is ridiculous to compare this with the demand made for information in regard to income upon those who are to get something back. I think this Amendment is of far greater importance than the number of Ministers present on the Front Bench would appear to indicate. This is a provision that will cause an enormous amount of irritation and a great deal of trouble without any reason whatever. I think the Government ought to explain more fully than they have done their reason for putting on the top of the tax a provision of this kind. They are not treating the people to criticise the proposal with the consideration they ought to receive. It appears to me that they cannot defend the provision at all, and that they are simply sheltering themselves in silence and leaving the House to vote on the Amendment without any defence of their own proposal.
§ Question put, "That the words 'whether he is or is not' stand part of the Clause."
§ The Committee divided: Ayes, 207; Noes, 65.315
|Division No. 694.]||AYES.||[8.55 p.m.|
|Abraham, W. (Cork, N.E.)||Byles, William Pollard||Foster, Rt. Hon. Sir Walter|
|Acland, Francis Dyke||Cawley, Sir Frederick||Fuller, John Michael F.|
|Agnew, George William||Cherry, Rt. Hon. R. R.||Fullerton, Hugh|
|Alden, Percy||Clough, William||Gibb, James (Harrow)|
|Allen, A. Acland (Christchurch)||Clynes, J. R.||Gill, A. H.|
|Allen, Charles P. (Stroud)||Collins, Stephen (Lambeth)||Gladstone, Rt. Hon. Herbert John|
|Ashton, Thomas Gair||Corbett, C. H. (Sussex, E. Grinstead)||Glendinning, R. G.|
|Atherley-Jones, L.||Cornwall, Sir Edwin A.||Glover, Thomas|
|Baker, Sir John (Portsmouth)||Cotton, Sir H. J. S.||Gnoch, George Peabody (Bath)|
|Baker, Joseph A. (Finsbury, E.)||Cowan, W. H.||Greenwood, Hamar (York)|
|Balfour, Robert (Lanark)||Cox, Harold||Gulland, John W.|
|Barker, Sir John||Craig, Herbert J. (Tynemouth)||Hancock, J. G.|
|Barnard, E. B.||Crosfield, A. H.||Harcourt, Rt. Hon. L. (Rossendale)|
|Barnes, G. N.||Crossley, William J.||Harcourt, Robert V. (Montrose)|
|Barran, Sir John Nicholson||Cullinan, J.||Hardie, J. Keir (Merthyr Tydvil)|
|Barry, Redmond J. (Tyrone, N.)||Dalziel, Sir James Henry||Hardy, George A. (Suffolk)|
|Bell, Richard||Davies, Ellis William (Eifion)||Harmsworth, Cecil B. (Worcester)|
|Belloc, Hilaire Joseph Peter R.||Davies, Sir W. Howell (Bristol, S.)||Harmsworth, R. L. (Caithness-shire).|
|Benn, Sir J. Williams (Devonport)||Dewar, Arthur (Edinburgh, S.)||Hart-Davies, T.|
|Benn, W. (Tower Hamlets, St. Geo.)||Dickinson, W. H. (St. Pancras, N.)||Harwood, George|
|Bethell, Sir J. H. (Essex, Romford)||Dobson, Thomas W.||Haworth, Arthur A.|
|Black, Arthur W.||Duckworth, Sir James||Hazleton, Richard|
|Bottomley, Horatio||Duffy, William J.||Hedges, A. Paget|
|Boulton, A. C. F.||Duncan, C. (Barrow-in-Furness)||Helme, Norval Watson|
|Bramsdon, Sir T. A.||Duncan, J. Hastings (York, Otley)||Henry, Charles S.|
|Branch, James||Dunn, A. Edward (Camborne)||Higham, John Sharp|
|Brigg, John||Edwards, Sir Francis (Radnor)||Hobhouse, Rt. Hon. Charles E. H.|
|Bright, J. A.||Elibank, Master of||Holt, Richard Durning|
|Brunner, J. F. L. (Lancs., Leigh)||Essex, R. W.||Hooper, A. G.|
|Burns, Rt. Hon. John||Evans, Sir S. T.||Hope, W. H. B. (Somerset, N.)|
|Burt, Rt. Hon. Thomas||Everett, R. Lacey||Horniman, Emslie John|
|Buxton, Rt. Hon. Sydney Charles||Findlay, Alexander||Idris, T. H. W.|
|Jackson, R. S.||Murray, James (Aberdeen, E.)||Soares, Ernest J.|
|Johnson, John (Gateshead)||Newnes, F. (Notts, Bassetlaw)||Stanley, Hon. A. Lyulph (Cheshire)|
|Johnson, W. (Nuneaton)||Nicholls, George||Steadman, W. C.|
|Jowett, F. W.||Norman, Sir Henry||Stewart, Halley (Greenock)|
|Joyce, Michael||Nuttall, Harry||Stewart-Smith, D. (Kendal)|
|Kekewich, Sir George||O'Brien, Patrick (Kilkenny)||Straus, B. S. (Mile End)|
|King, Alfred John (Knutsford)||O'Connor, John (Kildare, N.)||Summerbell, T.|
|Laidlaw, Robert||O'Connor, T. P. (Liverpool)||Taylor, John W. (Durham)|
|Lamb, Edmund G. (Leominster)||O'Donnall, C. J. (Walworth)||Tennant, Sir Edward (Salisbury)|
|Lamb, Ernest H. (Rochester)||O'Malley, William||Tennant, H. J. (Berwickshire)|
|Lambert, George||Parker, James (Halifax)||Thomas, Sir A. (Glamorgan, E.)|
|Lamont, Norman||Partington, Oswald||Thomasson, Franklin|
|Layland-Barratt, Sir Francis||Perks, Sir Robert William||Thorne, G. R. (Wolverhampton)|
|Lea, Hugh Cecil (St. Pancras, E.)||Pirie, Duncan V.||Tomkinson, James|
|Lehmann, R. C.||Ponsonby, Arthur A. W. H.||Trevelyan, Charles Phillips|
|Lever, A. Levy (Essex, Harwich)||Power, Patrick Joseph||Vivian, Henry|
|Levy, Sir Maurice||Price, Sir Robert J. (Norfolk, E.)||Wadsworth, J.|
|Lewis, John Herbert||Priestley, Sir W. E. B. (Bradford, E.)||Walker, H. De R. (Leicester)|
|Lloyd-George, Rt. Hon. David||Radford, G. H.||Walsh, Stephen|
|Lupton, Arnold||Raphael, Herbert H.||Wardle, George J.|
|Lynch, H. B.||Rea, Rt. Hon. Russell (Gloucester)||Waring, Walter|
|Macdonald, J. M. (Falkirk Burghs)||Rea, Walter Russell (Scarborough)||Wason, John Cathcart (Orkney)|
|MacVeigh, Charles (Donegal, E.)||Reddy, M.||Watt, Henry A.|
|M'Callum, John M.||Richards, T. F. (Wolverhampton, W.)||White, Sir George (Norfolk)|
|M'Laren, Sir C. B. (Leicester)||Ridsdale, E. A.||White, J. Dundas (Dumbartonshire)|
|M'Laren, H. D. (Stafford, W.)||Roberts, G. H. (Norwich)||Whittaker, Rt. Hon. Sir Thomas P.|
|Maddison, Frederick||Robinson, S.||Wiles, Thomas|
|Mallet, Charles E.||Roch, Walter F. (Pembroke)||Wilkie, Alexander|
|Markham, Arthur Basil||Roe, Sir Thomas||Williams, J. (Glamorgan)|
|Marnham, F. J.||Rogers, F. E. Newman||Wilson, Henry J. (York, W.R.)|
|Massie, J.||Rowlands, J.||Wilson, P. W. (St. Pancras, S.)|
|Menzies, Sir Walter||Russell, Rt. Hon. T. W.||Wilson, W. T. (Westhoughton)|
|Middlebrook, William||Samuel, Rt. Hon. H. L. (Cleveland)||Winfrey, R.|
|Molteno, Percy Alport||Schwann, Sir C. E. (Manchester)||Wood, T. M'Kinnon|
|Mond, A.||Seddon, J.||Yoxall, Sir James Henry|
|Mooney, J. J.||Shaw, Sir Charles E. (Stafford)|
|Muldoon, John||Shipman, Dr. John G.||TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.|
|Murray, Capt. Hon. A. C. (Kincard.)||Snowden, P.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Gooch, Henry Cubitt (Peckham)||Parkes, Ebenezer|
|Balcarres, Lord||Gordon, J.||Pease, Herbert Pike (Darlington)|
|Banner, John S. Harmood-||Gretton, John||Peel, Hon. W. R. W.|
|Baring, Capt. Hon. (Winchester)||Guinness, Hon. W. E. (B. S. Edm'ds.)||Powell, Sir Francis Sharp|
|Beckett, Hon. Gervase||Helmsley, Viscount||Pretyman, E. G.|
|Bridgeman, W. Clive||Hill, Sir Clement||Randles, Sir John Scurrah|
|Bull, Sir William James||Hope, James Fitzalan (Sheffield)||Renwick, George|
|Campbell, Rt. Hon. J. H. M.||Hunt, Rowland||Roberts, S. (Sheffield, Ecclesall)|
|Carlile, E. Hildred||Kennaway, Rt. Hon. Sir John H.||Rutherford, Watson (Liverpool)|
|Carson, Rt. Hon. Sir Edward H.||Kimber, Sir Henry||Salter, Arthur Clavell|
|Cave, George||Law, Andrew Bonar (Dulwich)||Smith, Abel H. (Hertford, E.)|
|Cecil, Evelyn (Aston Manor)||Lee, Arthur H. (Hants, Fareham)||Stanier, Beville|
|Coates, Major E. F. (Lewisham)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Staveley-Hill, Henry (Staffordshire)|
|Courthope, G. Loyd||Lonsdale, John Brownlee||Thomson, W. Mitchell- (Lanark)|
|Craik, Sir Henry||Lowe, Sir Francis William||Valentia, Viscount|
|Dickson, Rt. Hon. C. Scott||Lyttelton, Rt. Hon. Alfred||Walker, Col. W. H. (Lancashire)|
|Doughty, Sir George||MacCaw, William J. MacGeagh||Warde, Col. C. E. (Kent, Mid)|
|Douglas, Rt. Hon. A. Akers-||Magnus, Sir Philip||Wortley, Rt. Hon. C. B. Stuart-|
|Du Cros, Arthur||Mason, James F. (Windsor)|
|Duncan, Robert (Lanark, Govan)||Meysey-Thompson, E. C.|
|Faber, George Denison (York)||Mildmay, Francis Bingham||TELLERS FOR THE NOES.—Sir|
|Fletcher, J. S.||Morrison-Bell, Captain||H. Seymour King and Mr. Hicks Beach.|
|Ferster, Henry William||Newdegate, F. A.|
|Gardner, Ernest||Oddy, John James|
Question, "That the words 'not exceeding' be there inserted,' put, and agreed to.
§ Mr. WALTER GUINNESS
moved, at the end of Sub-section (1), to insert the words: "Provided that no notice shall be served under this Sub-section unless it contains a statement in writing under the hand of the said Commissioners detailing the reasons for which they allege that the income of the person on whom such notice is served exceeds five thousand pounds, and giving the facts, if any, upon which they rely in support of such allegation."
316 I have put down this Amendment with the object of providing that when the Commissioners demand a return they shall give the facts on which they rely in support of their allegation that the income of the person on whom the notice is served exceeds £5,000. The object is to prevent vexatious demands on the part of Inland Revenue officials. Of course, one has nothing but praise for the way the work is generally carried out by Government officials, but still, they are only human, and 317 it is always possible that in the lower ranks of any Department you will find individuals who believe that officiousness is likely to lead to promotion, and I do think, in view of the heavy labour involved in preparing these returns, that there should be a certain obstacle placed in the way of the demanding of these returns from those who cannot in any way be shown to be in possession of an income like that which would render them liable. There is no doubt that very great labour would be involved in these returns. According to the evidence of Sir Henry Primrose before a Select Committee, a return made for a Super-tax would be a very different affair from the return made by traders on Form No. 11. It must be a regular balance-sheet, showing on one side the taxpayer's income of every kind and on the other side deductions for charges that he has to meet, interest, jointures, annuities, etc., which do not form part of his income. These deductions would have to be defined by law, and even with the most minute directions the filling up of a form to many people might be a matter of difficulty, and the disputed points might be numerous. Even now difficulty is experienced by many taxpayers in filling up the comparatively simple form in which people have to state the proportion of their income which is chargeable, and I think it perfectly certain that a return of such complexity as this would not be prepared by a greater number of people without expert assistance. We were told yesterday by hon. Members—
The only point in the Amendment which the hon. Member wishes to move is whether the Commissioners shall have to state the reasons. So far as the Bill has gone the obligation has been imposed upon the taxpayer to make this return.
§ Mr. WALTER GUINNESS
I quite understand your point, but I do think it is relevant to my Amendment to show that these returns would involve a great deal of labour and ought not to be imposed on the taxpayer unless there is considerable—
That was just the argument which was used on the last Amendment. I have had very great difficulty with regard to the relevancy of this Amendment, which the hon. Member knows. At the same time I wished to give him an opportunity, if he had anything to say in regard to the specific Amendment, of saying it.
§ Mr. WALTER GUINNESS
I bow to your ruling, and I do not pursue again the question of cost save to say that I do think that in a great many cases the taxpayer would have to employ an accountant, and would be put to great expense; and in view of this fact I think that these returns ought to be limited to those cases in which the Inland Revenue officials would state in writing their reasons for believing that the people making the return possessed the incomes attributed to them.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)
If it were necessary for the Commissioners to give all the facts in any particular case on which they relied for the purpose of getting the Super-tax from the individuals, it would be unnecessary for them to require any returns from the taxpayers at all, because the facts would be established, and there would be no question as to those facts; and it would be quite unnecessary, therefore, to trouble the individual as to his opinion upon whether he is the person to pay the Super-tax. The whole object of serving the return is to enable the Commissioners to be sure that the person is liable to the tax. Really, it seems to me that the proposal of the hon. Gentleman is perfectly unnecessary, and, in all probability, would render consultation with the individual taxpayers themselves wholly superfluous. For these reasons it is impossible to accept the Amendment.
§ Mr. WALTER GUINNESS
I think it is a rather extraordinary assumption that this return would have to contain all the facts that concern the income of the person on whom the return is served. All we mean is that facts should be stated making out a plausible case why the Income Tax-payer is suspected of having a large income—it may be from the circumstance that he lives in a large house or has got shares on the register at Somerset House, or facts of that kind, which could easily be stated by the Commissioners, and which, if they had to be stated, would ensure that the Commissioners would be rather careful as to those on whom they served these notices. We know that the Commissioners will not be able to check all the notices; that necessarily will be left to subordinates; but I do think that a request of this kind would be most salutary in obviating a large amount of labour and expense on the part of the Income Tax-payer.
§ Mr. PRETYMAN
The right hon. Gentleman answered in a very superficial manner, his observations being directed rather to the form than the substance of the Amendment. He objected to the word "facts," but I think my hon. Friend would be perfectly satisfied if the last words were left out. As to the substance of the proposal, I do think some answer is necessary on the point that when the Commissioners serve a return of this character they should make some statement of the grounds on which they allege that the income is above £5,000 a year. If the right hon. Gentleman objects to the form of the Amendment, I feel quite sure my hon. Friend would be glad to meet his views on that point. It is obvious, as the right hon. Gentleman doubtless is aware, that there are frequently local rumours as to the incomes of persons, and it may be said that they exceed £5,000 a year when in fact the persons of whom this is alleged have no hope in any shape or form of reaching anything approaching such an income. I think it is necessary that there should be some safeguard, and that individual taxpayers should be protected against making irritating and expensive returns, without any grounds whatever being shown why they should do so.
§ Mr. HOBHOUSE
If I may, I will give the hon. and gallant Gentleman an instance which came within my own experience in my own locality, and it affords a very good reason why it would be undesirable to impose the obligation upon the Commissioners which the Amendment proposes. A person had been assessed for many years as being in possession of an income of something over £1,000 a year. Some reasons led the Commissioners to imagine that this was not the real income. During a series of years they had advanced the income, and it was not until the figure of something like £10,000 a year was reached that the individual objected to the assessment. He did not live under circumstances which led anybody to suppose that he possessed so great an income. The Commissioners could not have stated in the form suggested by the Amendment the circumstances which led them to think that he had a large income. There were no apparent facts which would have led anybody to suppose that he had so great an income as it was alleged he had. If it had been necessary that these facts should be stated, in the way the hon. Member desires, it could not have been done, and, therefore, following upon that, it would have been impossible for the Com- 320 missioners to carry out either the substance or the form of the Amendment.
§ Sir F. BANBURY
I have listened with interest to the answer of the right hon. Gentleman and to the instance he has given where a man has been in business or in a profession.
§ Sir F. BANBURY
Then I do not see how the right hon. Gentleman makes his case out to the Committee. If it was the case of a private individual he is not, under the present law, required to make any return at all, excepting the fact as to whether or not his income is taxed at the source. I think the right hon. Gentleman has forgotten that under this Bill, if it becomes law for the purpose of the Super-tax, a return will have to be made. That makes all the difference in the world. I cannot conceive how the case of a private individual is affected, because his income may have been derived either from investments or from securities. Investments and securities are taxed at the source, and where the investments are in land the individual is obliged to make a return. If he does not, the Commissioners of Inland Revenue make a return for him. I think the right hon. Gentleman must have been misinformed. If the man was engaged in business, then the instance given by the right hon. Gentleman might be correct. I have myself heard of many instances of a similar kind. A man engaged in business, as the law stands now, is not obliged to make a return from his business. If he does not make a return, the Commissioners tax him on what they think to be the proper figure, and he is obliged to pay upon that. If they tax him at above what he is actually earning, then he comes forward and says, "That is wrong, and I am prepared to prove it is wrong." That is quite a different case from that arising under the Super-tax, where, for the first time in the history of this country, a man has to make a return of his total income from all sources. I venture to say that the case mentioned by the right hon. Gentleman does not apply in respect of this particular Amendment. By this particular Amendment a man makes a return of what his income is, and if the Commissioners do not accept it, the Amendment proposes, as I understand it, that the Commissioners shall state the reasons why they did not accept it.
The discussion is travelling beyond the real point of the Amendment. Indeed this Amendment was really settled by the previous Amendment, and it was only by a little stretch that I called upon the hon. Member. The notice is that "every person upon whom notice is served in manner prescribed by Regulations by the Special Commissioners," etc., so that the question is whether the Commissioners shall be bound to send special notice of the grounds upon which they require the return.
§ Sir F. BANBURY
Yes, and serving notice to give reasons on those on whom they serve notice why they think they have over £5,000 per year. I venture to say that the instance given by the right hon. Gentleman is no answer at all to the Amendment, because that was a case where the man ought to make a return of his income, but refused to do so. Sir Henry Primrose, giving evidence on this question of the Super-tax, estimated that the number of persons who had incomes of more than £5,000 per year is not more than 12,000, and he said that in order to arrive at that you must send out notices to 90,000 or 100,000 persons. Unless some ground is given it would be open to the Commissioners to send notices to everybody who has apparently an income of more than £1,000 a year, or, as an hon. and learned Friend says, fishing notices, in the hope that they may rope in somebody who lives in a quiet kind of a way, and who is not supposed to have more than £1,000 per year. Therefore, I contend that this notice is going to be a subject of very great personal inconvenience to a large number of people, and that it is absolutely necessary that the Commissioners in serving these notices should show some ground for supposing that the person upon whom they serve the notice has more than £5,000 per year.
§ Mr. JAMES MASON
I agree that some means should be taken to prevent the Commissioners from sending out notices which would be unreasonable or a nuisance to a great number of people who evidently are not within the scope of the tax. At the same time I think there are two very serious obections to the proposal of my hon. Friend. The first is that I feel sure that the Commissioners would very soon drop into using some stereotyped forms of words. They would give the same sort of reason as, say, a bankrupt gives for his bankruptcy, by saying that he is living 322 beyond his means. I think the principal objection to the Amendment is that there probably is a considerable number of people whose natures are somewhat miserly, and who, although they have considerable incomes, live in a very much more quiet and humble manner than they need do. In such cases there would be great difficulty in ascertaining those people's conditions, and at the same time it will be very difficult to give a reason why the question was put to them. There are people who like to demonstrate to the world how extremely economically they can live, and those are hardly the kind to free from the burden of the tax. I do not see my way to support the Amendment.
§ Mr. JAMES HOPE moved as an Amendment to the proposed Amendment to leave out the words "and giving the facts, if any, upon which they rely in support of such allegations."
§ I gather from the Financial Secretary to the Treasury that he is afflicted with a neighbour who is parsimonious and fraudulent. But surely there are a number of cases of the opposite kind, and the class of person who displays a rather foolish ostentation in making people believe he is possessed of greater means than he actually has. There is a class of person who has made some money in the Colonies and who comes and lives for a year or two at home and spends his money in such a way as to lead people to suppose that his income is greater than it is. In cases like that some such proviso as that proposed seems necessary, and it would really save the Commissioners a great deal of trouble. If they saw a man who apparently had a large balance at the bank they would say to him, "Your expenditure leads us to suppose that your income comes up to the Super-tax limit." In that case he would very soon entirely remove that suspicion by showing, as he could show in private, without letting his neighbours know, that he is living on capital and designedly doing so. That will save the Commissioners a good deal of trouble, and they will not have to ask for any elaborate returns.
§ I think that the real argument for this Amendment is that the Commissioners, like everybody else, ought not to act without showing a primâ facie case. In every other department of Government activity it is absolutely necessary that a primâ facie case should be shown. I do object to the Commissioners assuming, as it were, a man's guilt and forcing him to prove his innocence, assuming a man's wealth and 323 forcing him to prove his poverty. It is for them to put forward a primâ facie case to show that he comes within the limit. Otherwise the procedure seems analogous to that of the French Juge d'Instruction. He is able to summon a man and examine him as to whether he knows anything about any certain matter which comes within the judge's jurisdiction. The judge can use the information which he gets to the person's disadvantage, not only on the immediate merits of the case, but in other respects. That would be the case here if a great number of fishing notes are sent at random. The Commissioners will acquire a great deal of information which they will use, not merely for the purpose of the Super-tax, but for other purposes. I think it is objectionable that the Commissioners should have the power to put on a great number of His Majesty's subjects the obligation and the great labour to prove their poverty under pain of being taxed as if they were wealthy. I move to the Amendment in answer to the objections of the Financial Secretary to the Treasury to the form of the Amendment.
§ Mr. WALTER GUINNESS
I do not think I need put the House to the trouble of a Division on this Amendment.
§ Amendment to the proposed Amendment, by leave, withdrawn.
§ Amendment, by leave, withdrawn.
§ Mr. W. R. PEEL moved to leave out Sub-section 3.
§ This Sub-section contains the very harsh proposal that it shall be the duty of every person chargeable with Super-tax to give notice that he is chargeable to the Special Commissioners before 30th September, and under Sub-section (4) if he does not do this he is liable to the exceedingly heavy penalty of £50. My complaint is that the Commissioners in this case do not decide as they do in ordinary cases of Income Tax on whom they are to serve notice. In such a case the man on whom the notice is served has to make a return, and if he does not do so he is charged by the Commissioners. In this case he has to invite the tax; he is in the position of having to invite the executioner to cut off his own head. I submit that it is extraordinarily hard that a duty, reinforced by a heavy penalty, should be placed upon a man in this way. In the case of a man whose income is just over £160 a year there is no necessity for him to write to the Commis- 324 sioners and proclaim the fact that he is chargeable with Income Tax. The Commissioners have to find it out for themselves. There may be some persons with incomes of more than £160 a year who are escaping Income Tax at the present moment; but it has never been suggested that it was their duty to invite he Commissioners to tax them. Why then is it to be done in the case of people with over £5,000? The Government will probably refer to the evidence of Sir Henry Primrose, where he says it might be difficult for the Commissioners to find out who were chargeable with Super-tax, and that they might have to send out a much larger number of notices than the number of persons really liable. But, because there may be a difficulty of that kind, it does not follow that you should adopt this quite unprecedented course. In many cases these people may not know whether they are liable to Super-tax or not, but I suppose the penalty would fall in their case as in the other. My objection is on principle and on precedent. You are introducing a new and unfair precedent. If you are going to tax people, the least you can do is to find out for yourselves who they are, and lay the tax upon them.
§ Mr. HOBHOUSE
It is not quite true that this is an entirely novel proposition. In theory—I do not press it in any way beyond that—under the Income Tax Act, 1842, Section 52, a person can already be required to make a return of his income. In practice, unquestionably—and there is no attempt to conceal the fact—this proposal is a novelty; but, merely because it is a novelty, it does not necessarily follow that it is either undesirable or wrong.
§ Mr. HOBHOUSE
"When required by general or particular notice." That is to say, if a notice is put up, as most of these notices are, on the church door, that is held to be a notice, although it need not necessarily reach the attention of the individual concerned. But, as I say, I do not press that point. Let us come to the practical part of the operation of this Subsection. Under the last Sub-section the person was required, when he got notice, to make a full declaration of his income. As was objected on the other side— 325 although I think not altogether with justice—it is probable, certainly possible, that more persons may have notice served upon them than are actually liable to pay the Super-tax. After those persons, therefore, who have already made the declaration that their income is so-and-so, and that they are therefore, or are not, liable to be taxed, there will still remain a small margin of persons who will have to make a return under this Section apart from any return which they have already made. A person belonging to the latter class will send in has declaration, and, in the words of the hon. Gentleman opposite, invite his fate. I confess I have not very much pity or sympathy with that small margin of persons. The man who will be liable to the Super-tax will have an income of over £5,000 a year. I do not think it is very hard that he should be required to make the declaration mentioned in the Sub-section, or if he fails to make it that he should have to submit to the subsequent penalty. He will certainly have laid a portion of his burden of taxation upon his neighbours. He will have shirked taxation which his neighbours will have to pay, and I do not think he can be regarded in any way as an object of pity.
§ Mr. PRETYMAN
I should rather agree with the last remark of the right hon. Gentleman. I think if a man has a very large income and wilfully conceals the fact, and thereby escapes the taxation which is imposed upon him, he certainly deserves to be punished by a fine. Certainly he ought to fulfil the obligation laid upon him. But there is a great deal more than that in the case, and what the right hon. Gentleman does not appear to realise is this, that it is most probable, and must occur, that there are a large number of people who will be brought within the purview of this tax who really honestly do not believe that they get £5,000 a year. Why, we debated yesterday for a very considerable time the most complicated and difficult question of the total income of the husband and the wife. It bears clearly upon this, because under this Sub-section, and under the Sub-section which follows, the man who, when he is liable, fails voluntarily to make a return, accuses himself of being liable to a heavy fine of £50.
§ Mr. HOBHOUSE
He is only liable after judgment has been given in the case. Judgment will not be given to enforce a penalty where it is a case of ignorance and not of wilful disregard of the law.
§ Mr. PRETYMAN
I do not think the man ought to be put into that position at all. A man is asked to make a return, and there will be numerous cases, I have no doubt, where a dispute will arise in this normal way: Under the Sub-section the Commissioners will send in a claim. The man will send back his return, giving the figure at something less than £5,000. The Commissioners will question that. There must be many such cases where the return having been questioned the Commissioners' view will prevail, and the subject will find that he must pay on the assessment of over £5,000—that he will have to pay the Super-tax. Such a man as that, such a man as I have in my mind, ought not to be put under any penalty whatever, real or prospective, for not sending in a voluntary return. Such a man will be haled before the court—and here everything again is left to the Treasury and to the Commissioners.
§ Mr. HOBHOUSE
The hon. and gallant Gentleman and myself are both agreed, I think, as to the righteousness of getting hold of the man who has got over £5,000 a year, and the only question is in the case where a man innocently makes a mistake as to the extent of his income. That man will have to be brought before the court, but I think, in the first case, the Commissioners of Inland Revenue would not take a case to court unless it was a very bad case. Supposing they were so ill-advised as to take a case to court, such as the hon. and gallant Gentleman has named, I take it that it is quite certain that there will be certainly no penalty for what was clearly nothing but a mistake on his part.
§ Mr. PRETYMAN
I am bound to say that there is much more harm in the Clause than good. I think it is highly improbable, and very unlikely, that any man with a large income of or about £5,000 a year will not receive notice from the Commissioners. The hon. Gentleman agrees. If those cases are, therefore, so few as to have very little importance, what is the object of the Clause?
§ Mr. PRETYMAN
Then the hon. Gentleman admits that wilful concealment is improbable. Where the income is very near £5,000, it would not be a case of wilful concealment, but of real doubt. Where it is a case of real doubt, then it is obvious that the penalty should not be inflicted. Really, I think it is not necessary to insert this Clause at all. You are 327 going to get very little by it, but people do not like to be made liable for a penalty for what is not an offence, and what cannot be really considered to be an offence at all. It is to be at the discretion and mercy of the Commissioners whether a man is a criminal or not. Is that the proper position to put a man in?
§ Mr. PRETYMAN
The Commissioners are to hale him before the court, and he is to be treated as a criminal. Surely the powers of the present Act ought to be sufficient in this case! Why not adopt the existing procedure of the Income Tax Act of 1842? The Commissioners will still have the power to proceed without this vexatious Sub-section. If you found a glaring case, as might be done under the present Act, if a man wilfully concealed the amount of his income you could proceed against him. What do you want more than that? You only want to take the glaring cases.
§ Mr. RAWLINSON
I do not in the least wish to differ with the right hon. Gentleman on this point. I agree it may be desirable to hit the particular class of persons who persistently and wilfully conceal the amount of their incomes, but that is not what this Section says, and the Section shows how very slovenly this Bill is drawn in several parts. This Section says that every person who has an income of over £5,000 a year has to give notice before 30th November. It is an absolute duty cast upon him. He has to give notice to the Commissioners, and that is a duty cast upon him quite irrespective of Subsection (2), so that after a man had notice from the Commissioners, and even literally filled it up, that would not comply with this extremely badly drawn Sub-section, because he would be held to have failed if he had not given notice before 30th September. What is the next step? There is no question of fraud or anything of the sort. The right hon. Gentleman says he wishes to hit people who are wilfully guilty of fraud, but when you come to the next Sub-section there is not a word about that in it. He has got to give notice before 30th September. It is not a question of wilfully fails or fraudulently fails, if he fails in the duty cast upon him by Subsection (3), he is committing an offence, and somebody or other has the right to take proceedings against him in the High Courts. The right hon. Gentleman tells us 328 the courts can exercise discretion; but the court has really no discretion. It is proved that a man has failed to give notice before 30th September, and once that is done the man becomes liable to the penalty, and the court has no discretion. The right hon. Gentleman says the penalty would not be enforced; but the court would have no jurisdiction to do otherwise than to give judgment. The Section does not say that a man is liable to a penalty not exceeding £50; it is that he is liable to a penalty of £50. We are told we might trust to the good sense and propriety of the Commissioners not to take proceedings unless it was a proper case to do so. I protest against this method of drawing Acts of Parliament. You draw thorn in such a way as to make a man liable for £50 if brought before the court by the Commissioners, and I protest against Parliament saying you may trust the Commissioners not to take such proceedings unless they are proper. Commissioners are human, like other people; at any rate, in drawing an Act of Parliament you ought not to give a power which is unnecessary, and which clearly it is not the intention of Parliament to give.
§ Mr. LLOYD-GEORGE
There is a substantial agreement, I think, between both sides as to what is the aim of a Clause like this in the Finance Bill. I think both the hon. Gentlemen who have just spoken agree that a man who does wilfully conceal his income, knowing perfectly well that he has got £10,000 or £15,000 a year, ought to be subject to Sections (3) and (4). There are two or three very notorious cases which happened within the last few years. There was one case of a gentleman living in a single room on something like about £2 a week never paying a penny to the Income Tax, and paying very little to the general taxes, for he was a teetotaler, and never smoked, but when he died it was discovered he was worth millions. [An HON. MEMBER: "YOU could not enforce the penalty then."] No; but at all events we got something out of the estate. Such a person would always run a risk that one day he would be discovered, and would have to pay £50 in respect of every day of the offence. I think hon. Members will agree with me that that is a case in which you ought to have a Section of this kind. It is not the only case. There have been several cases of the kind. There are many persons who are pretty well known as having over £5,000 or having somewhere about that, and the Committee may depend upon it that in these cases notices will be served.
329 Take the owners of real property. Notice will be served upon some of them, because it is known they are landowners, and have over £5,000 a year. Take a man who has rather a large business; he is pretty well known. He may be a large shipowner or trader. The Inland Revenue Commissioners will serve him. There are cases of that kind. Last year the Inland Revenue Commissioners found an estate of two or three millions which was brought to their notice. They had never heard of it before, but the owner must have been in receipt of £50,000 or £100,000 a year. I quite agree that there will be cases where a man is in doubt. Suppose he is under the impression the whole time that he is not subject to the Super-tax and it is discovered by some legal interpretation or other that his wife had more money than he ever thought she possessed. It would be very hard that that man should be taken before the magistrate, even if the case was dismissed. [HON. MEMBERS "Hear, hear."] I notice that some of my Super-tax Friends behind me rather acclaim that sentence. My right hon. Friend the Secretary to the Treasury said you must depend to a certain extent upon the discretion of the court; they would not fine in a case of that kind. Nor would they. The hon. and learned Gentleman opposite said there is nothing in the Section to give them power to dismiss a case. He said that if a man failed to make his return before 30th September the court have got to fine him. I should be very willing to agree to any words that would safeguard a case of that kind. The words I suggest would come into the next subsection, which is the operative one. We might say "if any person without just excuse," or any words of that kind. [An HON. MEMBER: "Without reasonable excuse."] Very well, "if any person without reasonable excuse fails." I think that really meets the case. The case I refer to is that of a man who deliberately withholds from the Inland Revenue officials a very large portion of the necessary information. There is a legitimate desire to safeguard the case of a man who has withheld information because he was under the impression that he was not liable to the tax at all. I should be quite willing to accept the words "without reasonable excuse."
§ Mr. LLOYD-GEORGE
I would not object to those words. Sub-section (4) would then read, "If any person without reasonable excuse fails to make any return," and the latter part of the Sub-section would read, "Penalty not exceeding £50 for every day during which the failure continues."
§ Mr. JAMES MASON
I would like to know how you are going to put these obligations into operation. The Finance Secretary to the Treasury, in reply to my hon. Friend, spoke about the placing of notices on church doors. May I point out that this Sub-section is to be put in force by the mere passing of this Act, and there is no question whatever of any notice or of bringing the matter in any way to the knowledge of the public. It must be remembered that we have to deal with ordinary people who are not accustomed to reading Acts of Parliament. You can hardly throw an obligation of this kind upon the public, accompanied with a penalty like this, without making sure that the public has had a reasonble chance of knowing precisely what obligations have been thrown upon them. The concession of the Chancellor of the Exchequer would presumably cover the case where a man had shown on oath that he did not know of these obligations. I wish to point out that the obligations imposed by this Subsection come into operation immediately the Act is passed, without any notice being given.
§ Mr. RENWICK
I am pleased to hear that the Chancellor of the Exchequer recognises by his concession that we have some reason on our side. His speech, however, was confined mainly to the penal Clause. I would like to call the attention of the right hon. Gentleman to the effect of this Clause. You have already got power for the Special Commissioner to assess an individual. When he considers that he is liable to the Super-tax there is power to send to that individual a return which he has got to fill in. Sub-section (3) provides that "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 30th day of September in the year for which the Super-tax is chargeable." I maintain, at any rate for the next two or three years, until this arrangement gets into working order, you are asking people to do something which is absolutely impossible for them to do. The income of 331 a man may fluctuate from day to day and from month to month, and he cannot immediately say whether he is liable to the Super-tax or not.
§ 10.0 P.M.
§ Mr. LLOYD-GEORGE
May I invite the hon. Member to bear in mind the promise I made to insert certain words just now and read this Sub-section with those words inserted. In a case of the kind the hon. Member mentions, where it was impossible to give the information, it would be "a reasonable excuse."
§ Mr. RENWICK
That is an additional reason why we should leave out this Subsection, because it is absolutely unworkable. You have ample power in the previous Sub-sections, and you have your penal Clause, and why not leave out this Sub-section altogether. You are putting the trading classes in a very difficult position. I cannot imagine why the right hon. hon. Gentleman does not try to get the commercial trading clases upon his side. The more you irritate them the less sympathy they will have for you. I do appeal to the right hon. Gentleman to leave out this Sub-section altogether. I quite recognise that there is very little left to fight for now, and I cannot see why the Chancellor of the Exchequer objects to the leaving out of these words.
§ Mr. WALTER GUINNESS
The right hon. Gentleman says that the words "without reasonable excuse" would cover the case of a man who is ignorant of the Act. There is a well-known maxim that ignorance of the law is not any excuse at all. It is absurd to expect everybody in the country who is liable to the Super-tax to read this Act of Parliament. In addition to these heavy penalties, are people to be expected to wade through every Act of Parliament that is passed? It is very objectionable to create these offences and not give those concerned due notice. How is the man in the country who does not read these Acts of Parliament to know who he has to notify? He does not know where the General Commissioners or the Special Commissioners are to be found, and how is he to find out? I have been making inquiries upon this point myself. I want to know whether I have to write to Dublin or to London in regard to a house which I happen to have. It is very difficult to find these things out. If a person does not know the address of the Special Commissioners, will that be 332 "a reasonable excuse," and will it prevent him from being prosecuted! When we have got to choose between a possible loss to the revenue, and a very great injustice to individuals, I think we ought to see that it is the revenue, and not the individual who suffers.
§ Mr. PRETYMAN
I think the suggestion of the right hon. Gentleman would meet the main facts of the case, because, after all, it is the penalty which is the point. If you impose an obligation, legal or otherwise, it is valueless without a penalty; but I do think there is a point raised by my hon. and learned Friend as to the drafting of this Sub-section, and I hope between now and the Report stage the right hon. Gentleman will turn his attention to it. I do not think we need waste our time on it now, and, if the right hon. Gentleman would insert the words he suggests, I think my hon. Friend would be content.
§ Mr. PEEL
As my hon. Friend is anxious I should withdraw, I would be quite willing to do so. I recognise that the Chancellor of the Exchequer has made an alteration with regard to the penalty, but my main objection was on the ground of principle. You ought to tax the man yourself, and not ask a man himself to invite taxation. If we have got something by this protest it is perhaps better to accept that, and drop the other point.
§ Mr. RIDSDALE
I have an Amendment upon the Paper, but I quite agree that the Amendment the Chancellor of the Exchequer is going to move will practically remove the ground of my objection. There is one point which has not been named, and that is the penalty for making a false return is less than that for not disclosing the fact that one's income is over £5,000. I think the giving of a false return is an act much more deserving of punishment. The declaration in one case is that the Commissioners may make an assessment of the Super-tax to the best of their ability, whereas the man who has failed to give notice as required is to be liable to be hailed before the Justices and fined £50.
§ Amendment, by leave, withdrawn.
§ Amendments made: At the end of Subsection (3) to insert the words: "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."—[Mr. Lloyd-George.]333
§ In Sub-section (4), after the word "person" ["If any person"], to insert the words "without reasonable excuse."—[Mr. Lloyd-George.]
§ Mr. WALTER GUINNESS moved, in Sub-section (4), to leave out the word "of" ["penalty of £50"] and to insert instead thereof the words "not exceeding."
§ Mr. RAWLINSON
I admit the reasonableness of the concession made by the right hon. Gentleman, but would it not be possible to say that none of these proceedings should be taken without the consent of the Attorney-General, so as to safeguard anybody who forgets to make the return being proceeded against? Even a Cabinet Minister might forget to make the return before September 30th.
§ Mr. LLOYD-GEORGE
I do not care to promise to consider anything unless I can see some reasonable hope that I may be able to do something. I do not think this is a case for the Attorney-General to intervene. The Attorney-General never intervenes in these revenue matters now.
§ Question, "That the word 'of' stand part of the Clause," put and negatived.
§ Mr. LEVERTON HARRIS moved, in Sub-section (4), to leave out the words "and after judgment has been given for that penalty to a further penalty of fifty pounds for every day during which the failure continues."
§ This Amendment deals with penalties which the Act imposes on those who fail to make a return. I hope it will commend itself to the Chancellor of the Exchequer. There are three penalties imposed upon those who fail to make a return or give the proper notice required by this Act. The first penalty is one of £50, the second penalty is £50 for every day during which the failure continues after judgment has been given, and, if Sub-section (4) of the Clause is read in conjunction with Subsections (5) and (6), it will be found that, in the case of a person who fails to deliver a return under this Section, the Commissioners are authorised to make an assessment; and they are by Sub-section (6) given all the general powers and procedure with reference to assessments made by the Special Commissioners. That briefly means 334 the Special Commissioners can assess treble the amount of the tax in cases where a person has failed to make a return, or has not made a proper return. The penalty, therefore, is really duplicated. Instead of it only amounting to £50 and £50 for every day during which the failure continues, it is that plus a treble charge for the tax if the Commissioners choose to make that treble charge. This is a case of duplication which, possibly, the Chancellor of the Exchequer has overlooked. It is quite likely there may be cases where it will inflict very great hardship upon people who in the course of their ordinary occupation forget to make this return. They might be liable to much greater penalties than the Act ever contemplated. I hope the Chancellor of the Exchequer will consider the matter and alter the Clause in such a way that there will be no duplication.
§ Mr. LLOYD-GEORGE
Inasmuch as I have intimated my willingness to accept the Amendment of the hon. Member for Bury St. Edmunds (Mr. Walter Guinness) to insert the words "not exceeding" £50, I think that meets the point raised by the hon. Gentleman.
§ Amendment, by leave, withdrawn.
§ Mr. JAMES HOPE (in the absence of Mr. Stewart Bowles) moved, in Sub-section (4), after the word "judgment" ["and after judgment"], to insert the words "or the decision on appeal from such judgment of the Court of Appeal or the House of Lords, whichever shall be last."
§ There may be some legal question involved of which I am not apprised, but it certainly does look as if the penalty would run on from the date when judgment was given in the High Court until the appeal was heard, and if it were unsuccessful the taxpayer would be liable for £50 for every day after that on which the judgment was given. I do not think that can be the real intention of the Government.
§ Mr. LLOYD-GEORGE
I do not see that I can accept this Amendment, as it would be an inducement to appeal. It will be for the court to decide whether the operation of the fine shall be suspended until they have given judgment. I do not think this Amendment at all necessary.
§ Mr. LLOYD-GEORGE
If that were so we should be introducing an element of considerable uncertainty. But if it does imply "final judgment," then, of course, this Amendment is unnecessary.
§ Mr. RAWLINSON
But "final judgment" means judgment in the Court of First Instance unless execution is stayed.
§ Mr. RUFUS ISAACS
The court is to fix the penalty, and I gather from the words of the right hon. Gentleman that the penalty is not to exceed £50, although the Court is to decree what further penalty the defendant shall be liable to if he does not comply with the judgment within so many days.
§ Mr. HELME
An appeal against an assessment made for the Super-tax by the Special Commissioners will go to the Special Commissioners, and will the Chancellor of the Exchequer make an arrangement by which Special Commissioners other than those who first dealt with the case should hear the appeal? I think it would be satisfactory to the public that the same man should not hear the appeal and deal in the second instance with the assessment he made in the first.
§ Mr. JAMES HOPE
The judgment is to be for £50 and then for £50 a day. If an appeal was entered, and it took some time, and it was ultimately dismissed, will the Court of Appeal or the House of Lords, whichever it is, have power to remit further penalties, because otherwise every day between the day of the judgment of the High Court and that of the appeal tribunal would add to the penalty? That, as far as I can read, is the effect which these words will have. If the Chancellor of the Exchequer will give an undertaking that if this Clause is interpreted in this sense the matter will be set right on Report, I shall be satisfied, but otherwise it becomes a serious matter, because although the appeal may have been dismissed, there may have been reasonable grounds for it, and it is unreasonable that a man shall be liable for a penalty for every day between the decision of the High Court and the Court of Appeal.
§ Sir H. KIMBER
I submit to the Chancellor of the Exchequer that this is a very strong point. The Statute will impose a penalty from the date the judgment, that is any judgment, is passed, and if the 336 appeal is dismissed, then under the Bill the man is liable from the original date of the judgment to the penalty.
§ Mr. LLOYD-GEORGE
I think really the question ought to be left to the discretion of the Court of Appeal. Although they do not take the view taken by the appellant, still they may think it is a reasonable case for an appeal. I will consider the point, but I had rather not give a final view upon it.
§ Mr. JAMES HOPE
But I take it that if there is reasonable grounds for appeal, and the Court of Appeal so decide, there will not be any addition. I will withdraw if the right hon. Gentleman will undertake to consider the matter.
§ Mr. LLOYD-GEORGE assented.
§ Amendment, by leave, withdrawn.
§ Amendment made: In Sub-section (4) to leave out the words "fifty pounds" ["a further penalty of fifty pounds"], and to insert instead thereof the words "a like amount."—[Mr. Lloyd-George.]
§ Sir H. KIMBER moved, at the end of Sub-section (4), to insert the words, "Provided that no penalty shall be recoverable hereunder unless fourteen days' notice in writing of intention to take proceedings for such penalty shall first have been given to such person by the Solicitor for Inland Revenue, and no return shall have been made before such proceedings are actually commenced."
§ There are hundreds of cases in which a man might have had no notice, and may have failed to receive it by accident from one cause or another, and it seems to me that if a man is to be prosecuted for a penalty under this Clause he ought at all events to have notice of it, and at least 14 days' locus pœnitentiœ to make his return.
§ Mr. HOBHOUSE
As a matter of fact, the Solicitor of Inland Revenue always does give this notice, and the Amendment is unnecessary. The last part of the proviso really nullifies Sub-section (3). I am sure that is not the hon. Baronet's intention.
§ Amendment, by leave, withdrawn.
§ Sir H. KIMBER moved, at the end of Sub-section (4), to insert "or in England in the county court of the district in which such person resides, provided that where proceedings are taken in England in the High Court and a sum not exceed- 337 ing the sum of one hundred pounds is recovered therein, the Crown shall not be entitled to any more costs than a plaintiff in an ordinary action founded on contract and recovering the same sum would have been entitled to."
§ It seems to me manifest justice that the Inland Revenue Commissioners should not be entitled to drag a suitor before the High Court and incur expensive proceedings when the lower court is available. If the sum recoverable is within their jurisdiction, the taxpayer ought not to be mulct on a larger scale than would be incurred as between ordinary suitors.
§ Mr. HOBHOUSE
This Amendment would be a very reasonable one if we were dealing with the case of persons who were in poor circumstances; but, in this case, we are dealing with persons with over £5,000 a year, and I do not think the safeguard proposed is really necessary.
§ Mr. RENWICK
I understood the Chancellor of the Exchequer earlier in the evening to state that the Attorney-General no longer took part in Revenue prosecutions. If he could assure us that such is the case, it would get over the objection that we have, but I understand that the Atorney-General in cases of this description is entitled to a brief which carries with it a considerable fee, and the unfortunate person who has already been fined, probably with an extra penalty for every day he is in default, will be saddled with the heavy expenses of the Attorney-General. If the Chancellor of the Exchequer could assure us upon that point, it might get over the difficulty which we are in at present. The point I wish to make clear is whether it is a fact that at the present time the Attorney-General does not take any part in prosecutions with regard to revenue.
§ Mr. LLOYD-GEORGE
I said in answer to the hon. Member opposite that in order to institute a prosecution it is not necessary to get the sanction of the Law Officers. The Inland Revenue take these prosecutions generally on their own initiative. In a case of great importance I can understand that they might wish to have the opinion of the Law Officer where there was some question of principle involved. I should have thought that it was a safeguard for the taxpayer that he should have his case tried in the High Court rather than the county court. I should have thought that he would have chosen to have the matter dealt with in the highest court of the land rather than by a court in the district in which he happens to reside.
§ Mr. RENWICK
Whatever may be the case in Wales, I assure the right hon. Gentleman that we in England have the utmost confidence in the county court judges. In this case the penalty would not exceed £100, and, therefore, I think it might well be dealt with by the county court. That would save heavy costs, and also the fee of the Attorney-General as to which the Solicitor-General seems to be in absolute ignorance.
§ Sir H. KIMBER
I do not see any reason why a rich man should not have the same avenues of justice open to him as a poor man. Why should he be put to unnecessary expense in the High Court when a lower court, where the expense is less, has been provided for the determination of these very questions? It seems to me that the same courts of justice ought to be available for all.
§ Sir WILLIAM BULL
I would suggest that it should be competent to institute a prosecution in the county court, and that the accused person should have the option of moving that the trial should take place in the High Court.
§ Amendment, by leave, withdrawn.
§ Amendment made: In Sub-section (5), to leave out the word "deliver" ["If any person fails to deliver a return"], and to insert instead thereof the word "make."—[Mr. Lloyd-George.]
§ Mr. CAVE
I beg to move, in Sub-section (5), to leave out the words "or to give any notice required by this Section."
The effect of the Sub-section as it stands is that if a man fails to make a return, or if he fails to give notice, he may be assessed. I think it is quite right that if he fails to make a return when called upon he should be assessed, but if he merely fails to give notice it appears to me that before an assessment is made the Commissioners should give him notice in order that he may have a chance of making his own return first. Then if he fails to do that the Commissioners should make an assessment.
§ Mr. PRETYMAN
May I point out that now these words are really quite unnecessary, because Sub-section (5) does not impose any additional penal- 339 ties. It merely gives the Commissioners power to make an assessment of their own, so that these words do not apply at all. This is plain if we follow the procedure. A person fails to give the notice required by Sub-section (3), and therefore renders himself liable to penalties which the Committee have passed. All the Commissioners have got to do is to sent out a notice in the ordinary way, and if he then fails to deliver the return, obviously their duty, under the 5th Sub-section, will be to make the assessment themselves.
§ Mr. LLOYD-GEORGE
It really does not matter. It involves the notice, and therefore I do not think it worth taking up the time of the Committee with it, and I will accept the Amendment.
§ Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
§ Mr. EVELYN CECIL moved to add at the end of Sub-section (5) the words: "Provided that every assessment made under this Sub-section, and every notice thereof, shall contain a statement in writing under the hand of the said Commissioners detailing the reasons for which they allege that the income of the person assessed is the sum mentioned in the assessment, and giving the facts, if any, upon which they rely in support of such allegation."
§ I think that this is a rational Amendment. It is only fair that if the Commissioners assess an income at a particular figure they should be called upon to show some primâ facie grounds why they fixed on that particular figure. If we do not admit some arrangement of this kind I cannot help thinking that the situation develops really into one of tyranny, because the Commissioners have got absolute power. There is no appeal from them. They may come to any man and say, "your increase is over £5,000," and they may have no ground whatever for it. A man may be living on his capital, and they simply—
I understand that the hon. Member for Bury St. Edmunds (Mr. Waiter Guinness) moved an Amendment providing that no notice be served unless it contains a statement of the reasons for which the Commissioners allege that the income exceeds £5,000. If that is the case it is practically the same point.
§ Mr. PRETYMAN
The two occasions are entirely different. In the one case it is merely a matter of giving a notice, but this is a case of actual assessment of income on which the tax is chargeable.
§ Mr. EVELYN CECIL
Here the Commissioners are actually fixing the amount at a special figure, which they allege to be the sum which the income stands at. I think they ought to be made to show some primâ facie grounds why that should be. I do not think, in all common fairness, that it is right that any body of men, however impartial, should be able to go to an individual and say he has to prove that his income is less than the figure they said, while there is no appeal of any kind from their decision. If the Commissioners think that the person has an income in excess of £5,000, I think they ought to show some reason for their allegation. A man may be living on his capital, or in a luxurious manner which his income does not justify; but I do not think that should be a ground why the Commissioners should come down upon him to show what his income really is unless they have some primâ facie reason for bringing him to book. I should very much desire, if they are to have these absolute powers without appeal, that they should be compelled by statute to give some sort of reason why they think a man's income is as much as they say, and then leave him to prove that it is not. I do not think they ought to be allowed to come down upon a man without stating any reason. That savours far too much of tyranny.
§ Sir SAMUEL EVANS
This is a small point, and I think the request is quite an unreasonable one. The hon. Member will see there are two cases involved. The first is where there is no return at all made and the ether is where there is a failure on the part of the person to make a return. The Section says, "If any person fails to make any return or to give any notice required by this Section, he shall be liable to a penalty of £50, and after judgment," etc. Yet the Commissioners by this Amendment are asked to detail their reasons. There is no precedent at all for the proposal.
§ Mr. PRETYMAN
I quite admit that these particular words in themselves would have very little effect unless there was some court or body or superior authority 341 who could judge the reasons of the Commissioners, and see whether they were good or not. Does the right hon. Gentleman intend that the Commissioners under this Section should make assessments off their own bat without any appeal against their decision? I am quite sure he does not intend that. We have already imposed a penalty on any person who fails to make a proper return. I am quite sure that it cannot be the intention of the Government to place in the hands of the Crown and of the Commissioners the power of imposing any tax whatever, to an unlimited amount, upon subjects of the Crown without any appeal and with no reasons whatever. Surely that is an impossible situation which the right hon. Gentleman could not intend.
§ Mr. LLOYD-GEORGE
It would be out of order to discuss the question of appeal now, but I am quite willing, by the leave of the Committee, to say a word in reference to it. I agree there ought to be some provision as to appeal, and an arrangement will have to be made that a special court of appeal should sit in these cases.
§ Mr. LLOYD-GEORGE
No, not to a court of law on a question of amount. At the present moment there is an appeal from the District Commissioner to the Special Commissioner, but in this case we ought to have a special appeal to a special Court of Commissioners. That is the arrangement we propose to make in reference to this matter. I cannot invite
§ discussion on that now, and any observation of mine on it is out of order.
§ Mr. LLOYD-GEORGE
I do not think any amendment is necessary at all. Arrangements have already been made with regard to that.
§ Sir E. CARSON
Surely in a matter of this kind what guarantee will there be that there would be an appeal, or that a special tribunal will be set up unless it is in the Act of Parliament. Suppose the subject were told he had been assessed at so much, and that he must rest content with that?
§ Mr. LLOYD-GEORGE
If hon. and right hon. Gentlemen are not satisfied—I am not criticising—but if they are not satisfied with the undertaking of the Inland Revenue, I would be quite willing to put in provisions of the kind. I cannot do that at this stage. I would have to go back, and shall, therefore do it on Report stage.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 91; Noes, 222.343
|Division No. 695.]||AYES.||[10.50 p.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Faber, Capt. W. V. (Hants, W.)||Lowe, Sir Francis William|
|Anson, Sir William Reynell||Fell, Arthur||Lyttelton, Rt. Hon. Alfred|
|Balcarres, Lord||Fletcher, J. S.||MacCaw, Wm. J. MacGeagh|
|Banbury, Sir Frederick George||Forster, Henry William||M'Arthur, Charles|
|Banner, John S. Harmood-||Gardner, Ernest||Magnus, Sir Philip|
|Baring, Capt. Hon. G. (Winchester)||Gooch, Henry Cubitt (Peckham)||Mason, James F. (Windsor)|
|Beach, Hon. Michael Hugh Hicks||Gordon, J.||Mildmay, Francis Bingham|
|Beckett, Hon. Gervase||Gretton John||Morrison-Bell, Captain|
|Bowles, G. Stewart||Guinness, Hon. W. E. (B. S. Edmunds)||Newdegate, F. A.|
|Bridgeman, W. Clive||Hamilton, Marquess of||Nicholson, Wm. G. (Petersfield)|
|Bull, Sir William James||Hay, Hon. Claude George||Parker, Sir Gilbert (Gravesend)|
|Burdett-Coutts, W.||Helmsley, Viscount||Pease, Herbert Pike (Darlington)|
|Campbell, Rt. Hon. J. H. M.||Hill, Sir Clement||Peel, Hon. W. R. W.|
|Carille, E. Hildred||Hills, J. W.||Powell, Sir Francis Sharp|
|Carson, Rt. Hon. Sir Edward H.||Hope, James Fitzalan (Sheffield)||Pretyman, E. G.|
|Cave, George||Hunt, Rowland||Randles, Sir John Scurrah|
|Clyde, J. Avon||Kennaway, Rt. Hon. Sir John H.||Ratcliff, Major R. F.|
|Coates, Major E. F. (Lewisham)||Kerry, Earl of||Rawlinson, John Frederick Peel|
|Corbett, T. L. (Down, North)||Keswick, William||Renton, Leslie|
|Courthope, G. Loyd||Kimber, Sir Henry||Renwick, George|
|Craig, Captain James (Down, E.)||King, Sir Henry Seymour (Hull)||Roberts, S. (Sheffield, Ecclesall)|
|Craik, Sir Henry||Law, Andrew Bonar (Dulwich)||Ronaldshay, Earl of|
|Douglas, Rt. Hon. A. Akers.||Lee, Arthur H. (Hants, Fareham)||Rutherford, Watson (Liverpool)|
|Du Cros, Arthur||Lockwood, Rt. Hon. Lt.-Col. A. R.||Salter, Arthur Clavell|
|Duncan, Robert (Lanark, Govan)||Long, Col. Charles W. (Evesham)||Sheffield, Sir Berkeley George D.|
|Faber, George Denison (York)||Lonsdale, John Brownlee||Smith, Abel H. (Hertford, East)|
|Smith, Hon. W. F. D. (Strand)||Valentia, Viscount||Younger, George|
|Stanier, Beville||Walker, Col. W. H. (Lancashire)|
|Starkey, John R.||Warde, Col. C. E. (Kent, Mid)||TELLERS FOR THE AYES.—Mr. Evelyn Cecil and Mr. Leverton Harris.|
|Staveley-Hill, Henry (Staffordshire)||Williams, Col. R. (Dorset, W.)|
|Talbot, Rt. Hon. J. G. (Oxford Univ.)||Willoughby de Eresby, Lord|
|Thomson, W. Mitchell- (Lanark)||Wortley, Rt. Hon. C. B. Stuart-|
|Abraham, W. (Cork, N.E.)||Glendinning, R. G.||Nicholson, Charles N. (Doncaster)|
|Acland, Francis Dyke||Glover, Thomas||Norman, Sir Henry|
|Adkins, W. Ryland D.||Gooch, George Peabody (Bath)||Nuttall, Harry|
|Agar-Robartes, Hon. T. C. R.||Greenwood, Hamar (York)||O'Brien, Patrick (Kilkenny)|
|Agnew, George William||Gulland, John W.||O'Connor, John (Kildare, N.)|
|Allen, A. Acland (Christchurch)||Haldane, Rt. Hon. Richard B.||O'Connor, T. P. (Liverpool)|
|Allen, Charles P. (Stroud)||Hancock, J. G.||O'Donnell, C. J. (Walworth)|
|Atherley-Jones, L.||Harcourt, Rt. Hon. L. (Rossendale)||Parker, James Halifax)|
|Baker, Joseph A. (Finsbury, E.)||Harcourt, Robert V. (Montrose)||Partington, Oswald|
|Balfour, Robert (Lanark)||Hardie, J. Keir (Merthyr Tydvil)||Perks, Sir Robert William|
|Baring, Godfrey (Isle of Wight)||Hardy, George A. (Suffolk)||Pickersgill, Edward Hare|
|Barker, Sir John||Harmsworth, Cecil B. (Worcester)||Pirie, Duncan V.|
|Barlow, Sir John E. (Somerset)||Harmsworth, R. L. (Caithness-shire)||Ponsonby, Arthur A. W. H.|
|Barnard, E. B.||Hart-Davies, T.||Power, Patrick Joseph|
|Barnes, G. N.||Haworth, Arthur A.||Price, Sir Robert J. (Norfolk, E.)|
|Barran, Sir John Nicholson||Healy, Maurice (Cork)||Radford, G. H.|
|Barry, Redmond J. (Tyrone, N.)||Healy, Timothy Michael||Raphael, Herbert H.|
|Bell, Richard||Hedges, A. Paget||Rea, Rt. Hon. Russell (Gloucester)|
|Benn, Sir J. Williams (Devonport)||Helme, Norval Watson||Reddy, M.|
|Benn, W. (Tower Hamlets, St. Geo.)||Hemmerde, Edward George||Rendall, Athelstan|
|Bennett, E. N.||Henry, Charles S.||Richards, T. F. (Wolverhampton, W.)|
|Black, Arthur W.||Higham, John Sharp||Ridsdale, E. A.|
|Bottomley, Horatio||Hobhouse, Rt. Hon. Charles E. H.||Roberts, G. H. (Norwich)|
|Bowerman, C. W.||Holt, Richard Durning||Robertson, Sir G. Scott (Bradford)|
|Branch, James||Hooper, A. G.||Robinson, S.|
|Brigg, John||Hope, W. H. B. (Somerset, N.)||Roch, Walter F. (Pembroke)|
|Bright, J. A.||Horniman, Emslie John||Roe, Sir Thomas|
|Brunner, J. F. L. (Lancs., Leigh)||Idris, T. H. W.||Rogers, F. E. Newman|
|Burns, Rt. Hon. John||Isaacs, Rufus Daniel||Rowlands, J.|
|Burt, Rt. Hon. Thomas||Jackson, R. S.||Runciman, Rt. Hon. Walter|
|Buxton, Rt. Hon. Syndey Charles||Johnson, John (Gateshead)||Russell, Rt. Hon. T. W.|
|Byles, William Pollard||Johnson, W. (Nuneaton)||Rutherford, V. H. (Brentford)|
|Causton, Rt. Hon. Richard Knight||Jowett, F. W.||Samuel, Rt. Hon. H. L. (Cleveland)|
|Channing, Sir Francis Allston||Joyce, Michael||Scarisbrick, Sir T. T. L.|
|Cherry, Rt. Hon. R. R.||Kekewich, Sir George||Seddon, J.|
|Clough, William||King, Alfred John (Knutsford)||Seely, Colonel|
|Clynes, J. R.||Laidlaw, Robert||Shaw, Sir Charles E. (Stafford)|
|Cobbold, Felix Thornley||Lamb, Edmund G. (Leominster)||Shipman, Dr. John G.|
|Collins, Stephen (Lambeth)||Lamb, Ernest H. (Rochester)||Soares, Ernest J.|
|Collins, Sir Wm. J. (St. Pancras, W.)||Lambert, George||Stanley, Albert (Staffs, N.W.)|
|Cooper, G. J.||Lamont, Norman||Stanley, Hon. A. Lyulph (Cheshire)|
|Corbett, A. Cameron (Glasgow)||Layland-Barratt, Sir Francis||Steadman, W. C.|
|Corbett, C. H. (Sussex, E. Grinstead)||Lea, Hugh Cecil (St. Pancras, E.)||Stewart, Halley (Greenock)|
|Cornwall, Sir Edwin A.||Lehmann, R. C.||Stewart-Smith, D. (Kendal)|
|Cotton, Sir H. J. S.||Lever, A. Levy (Essex, Harwich)||Strachey, Sir Edward|
|Cowan, W. H.||Levy, Sir Maurice||Summerbell, T.|
|Craig, Herbert J. (Tynemouth)||Lewis, John Herbert||Taylor, John W. (Durham)|
|Crossley, William J.||Lloyd-George, Rt. Hon. David||Tennant, H. J. (Berwickshire)|
|Dalziel, Sir James Henry||Lough, Rt. Hon. Thomas||Thomas, Sir A. (Glamorgan, E.)|
|Davies, Ellis William (Eifion)||Lupton, Arnold||Thomasson, Franklin|
|Davies, Timothy (Fulham)||Lynch, A. (Clare, W.)||Thorne, G. R. (Wolverhampton)|
|Davies, Sir W. Howell (Bristol, S.)||Macdonald, J. M. (Falkirk Burghs)||Tomkinson, James|
|Dewar, Arthur (Edinburgh, S.)||Mackarness, Frederic C.||Trevelyan, Charles Philips|
|Dickinson, W. H. (St. Pancras, N.)||Macpherson, J. T.||Verney, F. W.|
|Dobson, Thomas W.||MacVeagh, Jeremiah (Down, S.)||Vivian, Henry|
|Duckworth, Sir James||MacVeigh, Charles (Donegal, E.)||Walsh, Stephen|
|Duncan, C. (Barrow-in-Furness)||M'Callum, John M.||Wardle, George J.|
|Duncan, J. Hastings (York, Otley)||McKenna, Rt. Hon. Reginald||Waring, Walter|
|Dunn, A. Edward (Camborne)||M'Laren, Sir C. B. (Leicester)||Warner, Thomas Courtenay T.|
|Dunne, Major E. Martin (Walsall)||M'Laren, H. D. (Stafford, W.)||Wason, Rt. Hon. E. (Clackmannan)|
|Edwards, Sir Francis (Radnor)||M'Micking, Major G.||Wason, John Cathcart (Orkney)|
|Elibank, Master of||Maddison, Frederick||Watt, Henry A.|
|Erskine, David C.||Mallet, Charles E.||White, Sir George (Norfolk)|
|Essex, R. W.||Markham, Arthur Basil||White, J. Dundas (Dumbartonshire)|
|Evans, Sir S. T.||Marnham, F. J.||Wiles, Thomas|
|Everett, R. Lacey||Massie, J.||Wilkie, Alexander|
|Falconer, J.||Middlebrook, William||Williams, J. (Glamorgan)|
|Ferguson, R. C. Munro||Molteno, Percy Alport||Wilson, Hon. G. G. (Hull, W.)|
|Findlay, Alexander||Mond, A.||Wilson, Henry J. (York, W.R.)|
|Foster, Rt. Hon. Sir Walter||Montgomery, H. G.||Wilson, P. W. (St. Pancras, S.)|
|Fuller, John Michael F.||Muldoon, John||Wilson, W. T. (Westhoughton)|
|Fullerton, Hugh||Murray, Capt. Hon. A. C. (Kincard.)||Wood, T. M'Kinnon|
|Gibson, J. P.||Myer, Horatio|
|Gill, A. H.||Newnes, F. (Notts, Bassetlaw)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton.|
|Gladstone, Rt. Hon. Herbert John||Nicholls, George|
§ Mr. HICKS BEACH (for Sir Seymour King) moved, to add at the end of Subsection (5), the words "Provided that no assessment shall be made hereunder where proceedings for a penalty have been commenced under Sub-section four hereof." For not complying with the Sub-section as to making a return a man is liable to a penalty of £50; and, secondly, to punitive fines of £50 for every day that he fails to make his return. Under Sub-section (5) and Subsection (6) the Super-tax Commissioners are given powers to make an assessment if needed. A man may be liable to these cumulative penalties of £50 and to treble the amount of the duty for which lie is liable. In the general law with regard to Income Tax that is not the case. A man cannot be liable to treble the amount of the duty while he is being sued in the High Courts. All I ask in this Amendment is that a man shall not be subject to treble the duty, while at the same time being sued in the courts.
§ Sir SAMUEL EVANS
I do not think the hon. Member can really mean to do what this Amendment says, and I am not surprised that the hon. Baronet in whose name it stands (Sir Seymour King) is not here to move it. A penalty is imposed upon a person who wilfully neglects a duty imposed upon him by the State. He is obliged to make a return, and if he fails he is liable to a penalty. Nevertheless, the hon. Member wants to provide that although a man fails in his duty, and thereby incurs a penalty, the Commissioners should be prevented from imposing it.
§ Mr. HICKS BEACH
I want to prevent the Commissioners making a treble assessment upon the property in addition to bringing the man before the High Court.
§ Amendment negatived.
§ Mr. LLOYD-GEORGE moved, in Subsection (6), to leave out the words "the general powers and procedure with reference to assessments made by the Special Commissioners," and to insert instead thereof the words "provisions of the Income Tax Acts relating to persons who are to be chargeable with duty, assessments."346
§ This and the two following Amendments are necessary in order to give to the Commissioners powers already possessed by the Income Tax Commissioners; they confer no new powers.
§ Amendment agreed to.
§ Further Amendments made: In Subsection (6), to leave out the word "to" ["and to appeals"].
§ In Sub-section (6), to leave out the words "assessments by the Special Commissioners" ["assessments by the Special Commissioners under this Section"], and to insert instead thereof the words "the charge, assessment, collection, and recovery of duty."
§ Mr. LLOYD-GEORGE moved, at the end of Sub-section (6), to insert the words "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."
§ Sir E. CARSON
Does the Chancellor of the Exchequer think it proper that these gentlemen should have the powers of inspectors and surveyors of taxes? It seems to me an extraordinary thing that they should have that power. Surely they have their own duties to do.
§ Mr. LLOYD-GEORGE
The words have that appearance, but it really is not the case. It is necessary to insert these words in order to enable them to make the assessment.
§ Sir E. CARSON
When the surveyor makes the assessment it goes to the General Commissioners. You are now going to make the Special Commissioners detectors in the cases they are to decide. I shall certainly divide against this Amendment.
§ The Committee divided: Ayes, 216; Noes, 85.349
|Division No. 696.]||AYES.||[11.10 p.m.|
|Abraham, W. (Cork, N.E.)||Ainsworth, John Stirling||Balfour, Robert (Lanark)|
|Acland, Francis Dyke||Allen, A. Acland (Christchurch)||Baring, Godfrey (Isle of Wight)|
|Adkins, W. Ryland D.||Allen, Charles P. (Stroud)||Barker, Sir John|
|Agar-Robartes, Hon. T. C. R.||Atherley-Jones, L.||Barlow, Sir John E. (Somerset)|
|Agnew, George William||Baker, Joseph A. (Finsbury, E.)||Barnard, E. B.|
|Barnes, G. N.||Harmsworth, Cecil B. (Worcester)||O'Donnell, C. J. (Walworth)|
|Barran, Sir John Nicholson||Harmsworth, R. L. (Caithness-shire)||Parker, James (Halifax)|
|Barry, Redmond J. (Tyrone, N.)||Haworth, Arthur A.||Partington, Oswald|
|Bell, Richard||Healy, Maurice (Cork)||Perks, Sir Robert William|
|Benn, Sir J. Williams (Devonport)||Healy, Timothy Michael||Pickersgill, Edward Hare|
|Benn, W. (Tower Hamlets, St. Geo.)||Hedges, A. Paget||Pirie, Duncan V.|
|Bennett, E. N.||Helme, Norval Watson||Pollard, Dr. G. H.|
|Black, Arthur W.||Hemmerde, Edward George||Ponsonby, Arthur A. W. H.|
|Bottomley, Horatio||Henderson, J. McD. (Aberdeen, W.)||Power, Patrick Joseph|
|Bowerman, C. W.||Henry, Charles S.||Price, Sir Robert J. (Norfolk, E.)|
|Branch, James||Herbert, Col. Sir Ivor (Mon. S.)||Radford, G. H.|
|Brigg, John||Higham, John Sharp||Rea, Rt. Hon. Russell (Gloucester)|
|Bright, J. A.||Hobhouse, Rt. Hon. Charles E. H.||Rea, Walter Russell (Scarborough)|
|Brunner, J. F. L. (Lancs., Leigh)||Holt, Richard Durning||Reddy, M.|
|Burns, Rt. Hon. John||Hooper, A. G.||Rendall, Athelstan|
|Byles, William Pollard||Hope, W. H. B. (Somerset, N.)||Richards, T. F. (Wolverhampton, W.)|
|Causton, Rt. Hon. Richard Knight||Idris, T. H. W.||Ridsdale, E. A.|
|Channing, Sir Francis Allston||Isaacs, Rufus Daniel||Roberts, G. H. (Norwich)|
|Cherry, Rt. Hon. R. R.||Johnson, John (Gateshead)||Robertson, Sir G. Scott (Bradford)|
|Clough, William||Jonnson, W. (Nuneaton)||Robinson, S.|
|Clynes, J. R.||Jones, William (Carnarvonshire)||Roe, Sir Thomas|
|Cobbold, Felix Thernley||Jowett, F. W.||Rogers, F. E. Newman|
|Collins, Stephen (Lambeth)||Kekewich, Sir George||Rowlands, J.|
|Collins, Sir Wm. J. (St. Pancras, W.)||King, Alfred John (Knutsford)||Runciman, Rt. Hon. Walter|
|Cooper, G. J.||Laidlaw, Robert||Russell, Rt. Hon. T. W.|
|Corbett, A. Cameron (Glasgow)||Lamb, Edmund G. (Leominster)||Rutherford, V. H. (Brentford)|
|Corbett, C. H. (Sussex, E. Grinstead)||Lamb, Ernest H. (Rochester)||Samuel, Rt. Hon. H. L. (Cleveland)|
|Cornwall, Sir Edwin A.||Lambert, George||Samuel, S. M. (Whitechapel)|
|Cotton, Sir H. J. S||Lamont, Norman||Scarisbrick, Sir T. T. L.|
|Cowan, W. H.||Layland-Barratt, Sir Francis||Seddon, J.|
|Craig, Herbert J. (Tynemouth)||Lea, Hugh Cecil (St. Pancras, E.)||Seely, Colonel|
|Crosfield, A. H.||Lehmann, R. C.||Shipman, Dr. John G.|
|Crossley, William J.||Lever, A. Levy (Essex, Harwich)||Simon, John Allsebrook|
|Dalziel, Sir James Henry||Levy, Sir Maurice||Soares, Ernest J.|
|Davies, Ellis William (Eifion)||Lewis, John Herbert||Stanley, Albert (Staffs, N.W.)|
|Davies, Timothy (Fulham)||Lloyd-George, Rt. Hon. David||Stanley, Hon. A. Lyulph (Cheshire)|
|Davies, Sir W. Howell (Bristol, S.)||Lough, Rt. Hon. Thomas||Steadman, W. C.|
|Dewar, Arthur (Edinburgh, S.)||Lupton, Arnold||Stewart, Halley (Greenock)|
|Dickinson, W. H. (St. Pancras, N.)||Lynch, H. B.||Strachey, Sir Edward|
|Dobson, Thomas W.||Macdonald, J. M. (Falkirk Burghs)||Summerbell, T.|
|Duckworth, Sir James||Mackarness, Frederic C.||Taylor, John W. (Durham)|
|Duncan, C. (Barrow-in-Furness)||MacNeill, John Gordon Swift||Tennant, H. J. (Berwickshire)|
|Duncan, J. Hastings (York, Otley)||Macpherson, J. T.||Thomas, Sir A. (Glamorgan, E.)|
|Dunn, A. Edward (Camborne)||MacVeigh, Charles (Donegal, E.)||Thomasson, Franklin|
|Dunne, Major E. Martin (Walsall)||M'Callum, John M.||Thorne, G. R. (Wolverhampton)|
|Edwards, Sir Francis (Radnor)||M'Kenna, Rt. Hon. Reginald||Tomkinson, James|
|Elibank, Master of||M'Laren, Sir C. B. (Leicester)||Trevelyan, Charles Philips|
|Erskine, David C.||M'Laren, H. D. (Stafford, W.)||Verney, F. W.|
|Essex, R. W.||M'Micking, Major G.||Vivian, Henry|
|Evans, Sir S. T.||Maddison, Frederick||Walsh, Stephen|
|Everett, R. Lacey||Mallett, Charles E.||Waring, Walter|
|Falconer, J.||Markham, Arthur Basil||Warner, Thomas Courtenay T.|
|Ferguson, R. C. Munro||Marnham, F. J.||Wason, Rt. Hon. E. (Clackmannan)|
|Findlay, Alexander||Massie, J.||Wason, John Cathcart (Orkney)|
|Fuller, John Michael F.||Middlebrook, William||Watt, Henry A.|
|Fullerton, Hugh||Mond, A.||White, Sir George (Norfolk)|
|Gibson, J. P.||Montgomery, H. G.||White, J. Dundas (Dumbartonshire)|
|Gill, A. H.||Muldoon, John||Wilkie, Alexander|
|Gladstone, Rt. Hon. Herbert John||Murray, Capt. Hon. A. C. (Kincard.)||Williams, J. (Glamorgan)|
|Glendinning, R. G.||Myer, Horatio||Williams, W. Llewelyn (Carmarthen)|
|Glover, Thomas||Newnes, F. (Notts, Bassetlaw)||Wilson, Hon. G. G. (Hull, W.)|
|Gooch, George Peabody (Bath)||Nicholls, George||Wilson, Henry J. (York, W.R.)|
|Gulland, John W.||Nicholson, Charles N. (Doncaster)||Wilson, P. W. (St. Pancras, S.)|
|Hancock, J. G.||Norman, Sir Henry||Wilson, W. T. (Westhoughton)|
|Harcourt, Rt. Hon. L. (Rossendale)||Nuttall, Harry||Wood, T. M'Kinnon|
|Harcourt, Robert V. (Montrose)||O'Brien, Patrick (Kilkenny)|
|Hardle, J. Keir (Merthyr Tydvil)||O'Connor, John (Kildare, N.)||TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.|
|Hardy, George A. (Suffolk)||O'Connor, T. P. (Liverpool)|
|Anson, Sir William Reynell||Carson, Rt. Hon. Sir Edward H.||Faber, George Denison (York)|
|Balcarres, Lord||Cave, George||Faber, Capt. W. V. (Hants, W.)|
|Banbury, Sir Frederick George||Cecil, Evelyn (Aston Manor)||Fell, Arthur|
|Banner, John S. Harmood-||Clive, Percy Archer||Fletcher, J. S.|
|Baring, Capt. Hon. G. (Winchester)||Clyde, J. Avon||Forster, Henry William|
|Beach, Hon. Michael Hugh Hicks||Coates, Major E. F. (Lewisham)||Gardner, Ernest|
|Beckett, Hon. Gervase||Courthope, G. Loyd||Gooch, Henry Cubitt (Peckham)|
|Bowles, G. Stewart||Craig, Captain James (Down, E.)||Gordon, J.|
|Bridgeman, W. Clive||Craik, Sir Henry||Gretton, John|
|Bull, Sir William James||Douglas, Rt. Hon. A. Akers-||Guinness, Hon. W. E. (B. S. Edmunds)|
|Burdett-Coutts, W.||Du Cros, Arthur||Hamilton, Marquess of|
|Carlile, E. Hildred||Duncan, Robert (Lanark, Govan)||Harris, Frederick Leverton|
|Hay, Hon. Claude George||Mason, James F. (Windsor)||Smith, Abel H. (Hertford, East)|
|Helmsley, Viscount||Mildmay, Francis Bingham||Smith, Hon. W. F. D. (Strand)|
|Hill, Sir Clement||Morrison-Bell, Captain||Stanier, Beville|
|Hills, J. W.||Newdegate, F. A.||Starkey, John R.|
|Hope, James Fitzalan (Sheffield)||Nicholson, Wm. G. (Petersfield)||Staveley-Hill, Henry (Staffordshire)|
|Hunt, Rowland||Parker, Sir Gilbert (Gravesend)||Talbot, Rt. Hon. J. G. Oxford Univ.)|
|Kennaway, Rt. Hon. Sir John H.||Pease, Herbert Pike (Darlington)||Thomson, W. Mitchell- (Lanark)|
|Kerry, Earl of||Peel, Hon. W. R. W.||Walker, Col. W. H. (Lancashire)|
|Keswick, William||Pretyman, E. G.||Warde, Col. C. E. (Kent, Mid)|
|King, Sir Henry Seymour (Hull)||Randles, Sir John Scurrah||Williams, Col. R. (Dorset, W.)|
|Law, Andrew Bonar (Dulwich)||Ratcliff, Major R. F.||Wintorton, Earl|
|Lee, Arthur H. (Hants, Fareham)||Rawlinson, John Frederick Peel||Wortley, Rt. Hon. C. B. Stuart-|
|Lockwood, Rt. Hon. Lt.-Col. A. R.||Renton, Leslie||Younger, George|
|Long, Col. Charles W. (Evesham)||Renwick, George|
|Lonsdale, John Brownlee||Roberts, S. (Sheffield, Ecclesall)|
|Lowe, Sir Francis William||Rutherford, Watson (Liverpool)||TELLERS FOR THE NOES.—Sir A. Acland-Hood and Viscount Valentia.|
|Lyttelton, Rt. Hon. Alfred||Salter, Arthur Clavell|
|MacCaw, Wm. J. MacGeagh||Sheffield, Sir Berkeley George D.|
§ Mr. CAVE moved at the end of Subsection (6) to add the words:—"Provided that any person charged by an assessment to Super-tax who shall think himself aggrieved by any determination of an appeal by the Special Commissioners shall be entitled, on giving notice in writing within ten days from such determination, to have the appeal reheard both on law and fact by the county court judge or the stipendiary magistrate, if any, of the district in which such person shall reside, and such judge or stipendiary magistrate shall have and exercise all the powers of the Special Commissioners in relation to the assessment appealed against and the determination thereof, and his decision on questions of fact shall be final and conclusive."
§ This gives an appeal against the decision of the Commissioners. I have adopted for the form the Irish precedent, with the alternative of appeal either to the county court judge or to the stipendiary magistrate. I am not wedded to either. I do not care in what form the appeal is given provided there is some appeal to an independent court. We have been told of some arrangement by which the appeal is from one Commissioner to another. What is proposed is this. The assessment for Super-tax is to be made by a salaried officer—a member of the Board of Inland Revenue, who is appointed as a Special Commissioner, and if the taxpayer is dissatisfied with the assessment he is to appeal not to some independent body, but to other members of the same Board of Special Commissioners. It will probably happen that if the first Commissioner goes on wrong lines his colleagues on the Board of special Commissioners will follow on the same lines; they will not deal with it on fresh lines. In one case it will be an appeal from C to A and B, and then in the next an appeal from A to B and C. It is conceded that there 350 must be an appeal, and what I press for is an effective one. In the first part of this Bill the question of an appeal was also raised from this side of the House, and one was ultimately given to Referees. Originally the Referees were to be appointed by the Government, but ultimately they were to be appointed by an independent authority, which was to consist of judges, and so on. Why should we not have in this case also a similar appeal? If you do not like a court then there could be an appeal to Referees appointed by an independent authority. I am quite certain that sooner or later this point must be conceded, and I am certain there will be some kind of arrangement under which another tribunal will be given in subsititution for the appeal from one Commissioner to another. I am not wedded to the county court appeal, but I want some kind of judicial tribunal set up, I do not care what it is. Art, all events, there must be an appeal, not to Government officials but to some independent tribunal.
§ Sir SAMUEL EVANS
Two matters are raised by this Amendment. The first deals with an appeal on questions of law, and the other with an appeal on questions of fact. The hon. and learned Gentleman has stated that sooner or later we must concede an appeal, apparently according to him on both these matters, but we do not agree at all, and I do not think the hon. and learned Gentleman would really argue—indeed, he has abstained from arguing that there ought to be an appeal from these special Commissioners on questions of fact to the county court judge or any other court of law with regard to whether the Super-tax is chargeable, and whether the income was £5,000. As the Bill now stands, there is an appeal on questions of law, and that, I think, is sufficient. There is no appeal on questions of fact, and I do not think the proposal in his Amendment is better than that in the Bill, namely, that it should be 351 decided by the Commissioners themselves. He has said once more, what has been said over and over again, that there must be an appeal from these gentlemen as they are in some sense judges in their own cause, but they are not so in any sense. No doubt they are officials, but I fail to understand how they can be said to be interested or how they can be said to be judges in their own cause. A judge in his own cause, as we generally understand it, is a man who may benefit by the decisions he may give. That is not the position they occupy at all, as long as we have to deal with questions of law. You cannot possibly have an appeal on questions of fact from these Commissioners.
§ Sir E. CARSON
I look upon this as a most tyrannical section. The Solicitor-General says these Commissioners will not be judges in their own case. I say they will. Would the Solicitor-General deny that the Surveyor of Taxes at present is interested in the case? He is the man who acts as a detective, getting evidence in regard to the matter, and having done so, he makes an assessment which is brought before the General Commissioners, and the Surveyor of Taxes appears on one side and the subject appears on the other. In this case the Special Commissioner is himself the Surveyor of Taxes. He makes the assessment. Having got evidence to his own satisfaction he then places it before himself, argues it to his own satisfaction, and decades it in accordance with the evidence that he himself has procured. I call that being judges in their own case, and it is idle and ridiculous to tell us that is a proper tribunal to set lip from which there is to be no appeal. I cannot understand the difficulty we have had with the Government in trying to prevent the whole of these assessments being kept entirely in the office of the Chancellor of the Exchequer to assess them just as the officer pleases. It is really a very serious thing to make a new departure, and unless you have an appeal you really have nothing more nor less than these Commissioners, who will say, "We are satisfied that the income ought to be so and so, and it must be so And so whether it is or not." That is absolutely unfair. It is at variance with the whole idea of the assessment of Income Tax as we have always understood it in this country, and this is about the most tyrannical clause which has been put into the Bill.
§ Mr. HELME
The fact that the assessment of the Super-tax is left in the hands of a Special Commissioner has given general satisfaction. The assessment of Super-tax is not exactly on the lines of the assessment for the ordinary payment of Income Tax, but rather the aggregation of the total that a man may enjoy whose income is beyond £5,000 from all sources. Therefore I think if the offer that has been made by the Chancellor of the Exchequer, to divide the Special Commissioners and allow a second set of Commissioners to be appointed as Appeal Commissioners, is accepted, the public will be well satisfied that the arrangement will be carried out entirely honestly and without difficulty in the working of this important scheme.
§ Mr. JAMES HOPE
There seems some doubt as to what the Chancellor of the Exchequer did adumbrate on the former Amendment. It was out of order for him then exactly to explain, but I understood that he did admit an appeal and said it would be to a Special Board. I did not understand that the Special Board should merely consist of the same Commissioners as the others, but that it should be in some way specially constituted. I did not understand exactly how it was to be constituted. It is of the utmost importance for us to know how it is to be constituted. I think the Government have fairly met us in regard to other points in regard to appeals, but in this particular case they have not done so. I do think that we ought to know from the Chancellor of the Exchequer how he proposes to set up this Board of Appeal. I understood him to say that he would bring in words which would make it perfectly clear, but as this Amendment raises the issue I think we are entitled to ask the right hon. Gentleman to state now what is to be the constitution of the board to which he is already committed.
§ Mr. LLOYD-GEORGE
I share the view that the appointment of the board should be in accordance with some statutory form provided for in the Bill itself. I am not prepared to submit any words at the present moment, but I will undertake to put words on the Paper which will give the House full opportunity for discussing the matter.
§ Mr. PRETYMAN
The question is whether these Commissioners, to whom there is to be an appeal, are to be independent of the Government of the day. Surely the right hon. Gentleman must see 353 what is to become of the liberty of the subject unless they are independent. This, in my opinion, is really in principle one of the most serious matters introduced in relation to this Bill. It may not be so if the right hon. Gentleman gives us the answer we desire. If the appeal is to be to an independent body of Commissioners or Referees, whose appointment is independent of the Government of the day, there will be some safeguard, but unless they are absolutely independent it must be obvious that the Government of the day will have the power of assessing any tax they choose on a subject of the Crown without appeal. Will the Chancellor of the Exchequer assure us that in the provision he proposes to insert he will make it absolutely clear that the Commissioners or Referees will be absolutely independent, and that they will not hold their appointment subject to the Government of the day?
§ Mr. LLOYD-GEORGE
I think the hon. Member opposite has exaggerated the point. What happens at the present moment? If any party is dissatisfied with the assessment, he may appeal to those very Commissioners, and there is absolutely no appeal from them. Their decision is final, except on a question of law. They are the same Commissioners, and they are appointed in the same way exactly. If a man has an income of £20,000, he can be assessed by these Commissioners at 1s. 2d. in the £. That does not interfere with the liberty of the subject, but the moment you charge the Super-tax of 6d. on £17,000 then at once, according to the hon. Member, it is an interference with the liberty of the subject. I think we have really met the Opposition as far as we possibly can in this matter. The position taken up by the hon. and learned Gentleman is perfectly ridiculous. It is absurd to say that if a man in the position of Lord Rothschild wished to appeal against the assessment, he should go before Mr. Plowden or the magistrate at Bow Street. That is really not an appeal on a question of this kind. You cannot ask men in these positions to go to a police-court to get their incomes reviewed. These questions are infinitely better settled by these trained men who are really independent.
Anyone who thinks that the position of these civil servants is that they can be dismissed on a month's notice really knows nothing about the Civil Service. There is no more independent body of men as far 354 as the Executive is concerned. No Minister, Chancellor of the Exchequer, or Prime Minister ever interferes with these Commissioners. Anybody who knows anything about the working of the Treasury knows perfectly well that they never interfere in any individual case, whether of Death Duties or any other branch of the revenue, and never even know what is going on, and if there were any attempt to find out there is nobody who would resent it more than the officials of the Inland Revenue. It is quite true that where the special Commissioners assess now there is no appeal at all. We say that in future we are prepared to make an arrangement whereby there can be an appeal exactly as there is from judges now, an appeal from one judge to five judges of the same rank. There are cases now of that kind, of judges in the same rank, sitting in judgment on the decision given by one judge. The same sort of arrangement will be made by the Special Commissioners. I cannot conceive a better tribunal. They are experienced, trained, high-minded and impartial, and I do not think that the subject need fear.
§ Mr. CAVE
I do not think it would be easy in the course of a short speech to give a more inadequate impression of the law as it stands at the present time than the right hon. Gentleman has done. The right hon. Gentleman says that at present there is an appeal to Special Commissioners, and there is no apeal from them on questions of fact. As a matter of fact there is no appeal to the Special Commissioners, but an option to be assessed either by the Special Commissioners or by an independent body of General Commissioners. I think the view which the public take may be guessed from the fact that less than 1 per cent. of the cases go to the Special Commissioners. That is so for the very reason that people know that the Special Commissioners are Government officials, against whom I say nothing, except that Government officials, whether they like it or not, and whether they know it or not, charged with the assessment and collection of taxes, must have a bias in favour of putting the assessment up. I am astonished that the Liberal Party of all bodies in the world should be ready apparently to commit themselves in finance wholly to the control of a set of Government officials. It is not my idea of the old Liberal Party. As things are now the assessment is made by an independent 355 tribunal—that is, the general body of Commissioners. It is only if the subject likes that it goes to these Special Commissioners, and in less than 1 per cent. of the cases is that course taken, and for the very reason that the right hon. Gentleman has given, that there is no appeal from them on the question of fact. If a man is going to be assessed for taxes he ought not to be subject to the uncontrolled discretion of Government officers, however high placed, high minded, or desirous of doing their duty. It has been admitted in Debate on the earlier Clauses that he ought to have recourse to, at all events, somebody outside Government influence. I tried earlier in the night to give the option to go to the General Commissioners. That was not conceded. The decision of the Committee was that the assessment must go to those Government officials. I say there ought to be an appeal from them of some kind on questions of fact. I do not care at all about the form of the appeal provided that appeal is given to some independent body.
§ Mr. STUART-WORTLEY
It seems to be assumed that to say of the Inland Revenue officials they are zealous in the collection of the Revenue is some kind of reproach to them. It is exactly the contrary. It is a matter of praise. No doubt the Treasury and future Chancellors of the Exchequer will all expect them to be zealous. What the Opposition complain of is that the Government are about to produce a state of things under which the amour propre and the esprit de corps of the Civil Service are going to be so twisted and distorted as to be a mischief to the taxpayer and an invasion of the liberty of the subject. That is only one of many results that follow from this hopelessly illogical and absurd attempt to confine executive and judicial duties in this way, and to suppose that no mischievous results will follow therefrom.
§ Question put. "That those words be there inserted."
§ The Committee divided: Ayes, 89; Noes, 208.357
|Division No. 697.]||AYES.||[11.45 p.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Gardner, Ernest||Pease, Herbert Pike (Darlington)|
|Anson, Sir William Reynell||Gooch, Henry Cubitt (Peckham)||Peel, Hon. Wm. Robert Wellesley|
|Arkwright, John Stanhope||Gordon, J.||Pretyman, Ernest George|
|Balcarres, Lord||Gretton, John||Randles, Sir John Scurrah|
|Baldwin, Stanley||Guinness, Hon. W. E. (B. S. Edmunds)||Ratcliff, Major R. F.|
|Banbury, Sir Frederick George||Hamilton, Marquess of||Rawlinson, John Frederick Peel|
|Banner, John S. Harmood-||Hardy, Laurence (Kent, Ashford)||Renton, Leslie|
|Baring, Capt. Hon. G. (Winchester)||Harris, Frederick Leverton||Renwick, George|
|Beach, Hon. Michael Hugh Hicks||Hay, Hon. Claude George||Roberts, S. (Sheffield, Ecclesall)|
|Beckett, Hon. Gervase||Helmsley, Viscount||Rutherford, Watson (Liverpool)|
|Bowles, G. Stewart||Hill, Sir Clement||Salter, Arthur Clavell|
|Bridgeman, W. Clive||Hills, J. W.||Sheffield, Sir Berkeley George D.|
|Bull, Sir William James||Hope, James Fitzalan (Sheffield)||Smith, Abel H. (Hertford, East)|
|Burdett-Coutts, W.||Hunt, Rowland||Smith, Hon. W. F. D. (Strand)|
|Campbell, Rt. Hon. J. H. M.||Joynson-Hicks, William||Stanier, Beville|
|Carlile, E. Hildred||Kennaway, Rt. Hon. Sir John H.||Starkey, John R.|
|Carson, Rt. Hon. Sir Edward H.||Kerry, Earl of||Staveley-Hill, Henry (Staffordshire)|
|Cecil, Evelyn (Aston Manor)||Keswick, William||Talbot, Rt. Hon. J. G. (Oxford Univ.)|
|Clive, Percy Archer||King, Sir Henry Seymour (Hull)||Thomson, W. Mitchell- (Lanark)|
|Clyde, James Avon||Lane-Fox, G. R.||Valentia, Viscount|
|Coates, Major E. F. (Lewisham)||Law, Andrew Bonar (Dulwich)||Walker, Col. W. H. (Lancashire)|
|Courthope, G. Loyd||Lockwood, Rt. Hon. Lt.-Col. A. R.||Warde, Col. C. E. (Kent, Mid)|
|Craig, Captain James (Down, E.)||Long, Col. Charles W. (Evesham)||Williams, Col. R. (Dorset, W.)|
|Craik, Sir Henry||Lonsdale, John Brownlee||Wilson, A. Stanley (York, E. R.)|
|Douglas, Rt. Hon. A. Akers-||Lowe, Sir Francis William||Winterton, Earl|
|Duncan, Robert (Lanark, Govan)||MacCaw, William J. MacGeagh||Wortley, Rt. Hon. C. B. Stuart-|
|Faber, Capt. W. V. (Hants, W.)||Mason, James F. (Windsor)||Younger, George|
|Fell, Arthur||Mildmay, Francis Bingham|
|Fletcher, J. S.||Morrison-Bell, Captain||TELLERS FOR THE AYES.—Mr. Cave and Mr. George Faber.|
|Forster, Henry William||Nicholson, Wm. G. (Petersfield)|
|Foster, Philip S. (Warwick, S.W.)||Parkes, Ebenezer|
|Abraham, William (Cork, N.E.)||Baring, Godfrey (Isle of Wight)||Black, Arthur W.|
|Acland, Francis Dyke||Barker, Sir John||Bottomley, Horatio|
|Atkins, W. Ryland D.||Barnard, E. B.||Bowerman, C. W.|
|Agar-Robartes, Hon. T. C. R.||Barnes, G. N.||Branch, James|
|Agnew, George William||Barran, Sir John N. (Hawick, B.)||Brigg, John|
|Ainsworth, John Stirling||Barry, Redmond J. (Tyrone, N.)||Bright, J. A.|
|Allen, A. Acland (Christchurch)||Bell, Richard||Prunner, J. F. L. (Lancs., Leigh)|
|Allen, Charles P. (Stroud)||Benn, Sir J. Williams (Devonport)||Burns, Rt. Hon. John|
|Baker, Joseph A. (Finsbury, E.)||Benn, W. (Tower Hamlets, St. Geo.)||Byles, William Pollard|
|Balfour, Robert (Lanark)||Bennett, E. N.||Causton, Rt. Hon. Richard Knight|
|Changing, Sir Francis Allston||Hedges, A. Paget||Ponsonby, Arthur A. W. H.|
|Cherry, Rt. Hon. R. R.||Helme, Norval Watson||Power, Patrick Joseph|
|Clough, William||Hemmerde, Edward George||Price, Sir Robert J. (Norfolk, E.)|
|Clynes, J. R.||Henry, Charles S.||Radford, G. H.|
|Cobbold, Felix Thornley||Herbert, Col. Sir Ivor (Mon. S.)||Rea, Rt. Hon. Russell (Gloucester)|
|Collins, Sir Wm. J. (St. Pancras, W.)||Higham, John Sharp||Rea, Walter Russell (Scarborough)|
|Cooper, G. J.||Hobhouse, Rt. Hon. Charles E. H.||Rendall, Athelstan|
|Corbett, A. Cameron (Glasgow)||Holt, Richard Durning||Richards, T. F. (Wolverhampton)|
|Cornell, C. H. (Sussex, E. Grinstead)||Hooper, A. G.||Ridsdale, E. A.|
|Cornwall, Sir Edwin A.||Johnson, John (Gateshead)||Roberts, G. H. (Norwich)|
|Cotton, Sir H. J. S.||Johnson, W. (Nuneaton)||Robinson, S.|
|Cowan, W. H.||Jones, William (Carnarvonshire)||Roe, Sir Thomas|
|Craig, Herbert J. (Tynemouth)||Keating, Matthew||Rogers, F. E. Newman|
|Crossley, William J.||King, Alfred John (Knutsford)||Rowlands, J.|
|Cullinan, J.||Lamb, Edmund G. (Leominster)||Runciman, Rt. Hon. Walter|
|Dalziel, Sir James Henry||Lambert, George||Russell, Rt. Hon. T. W.|
|Davies, Ellis William (Eifion)||Lamont, Norman||Rutherford, V. H. (Brentford)|
|Davies, Timothy (Fulham)||Lea, Hugh Cecil (St. Pancras, E.)||Samuel, S. M. (Whitechapel)|
|Davies, Sir W. Howell (Bristol, S.)||Lehmann, R. C.||Scarisbrick, Sir T. T. L.|
|Dewar, Arthur (Edinburgh, S.)||Lever, A. Levy, (Essex, Harwich)||Seddon, J.|
|Dickinson, W. H. (St. Pancras, N.)||Levy, Sir Maurice||Seely, Colonel|
|Dobson, Thomas W.||Lewis, John Herbert||Shaw, Sir Charles Edward|
|Duckworth, Sir James||Lloyd-George, Rt. Hon. David||Soares, Ernest J.|
|Duffy, William J.||Lough, Rt. Hon. Thomas||Stanley, Albert (Staffs, N.W.)|
|Duncan, C. (Barrow-in-Furness)||Lundon, Thomas||Stanley, Hon. A. Lyulph (Cheshire)|
|Duncan, J. H. (York, Otley)||Lupton, Arnold||Strachey, Sir Edward|
|Dunn, A. Edward (Camborne)||Lynch, H. B. (Yorks, W. R., Ripon)||Summerbell, T.|
|Dunne, Major E. Martin (Walsall)||Macdonald, J. M. (Falkirk Burghs)||Taylor, John W. (Durham)|
|Edwards, Sir Francis (Radnor)||Mackaness, Frederic C.||Tennant, H. J. (Berwickshire)|
|Elibank, Master of||Macpherson, J. T.||Thomas, Sir A. (Glamorgan, E.)|
|Erskine, David C.||MacVeagh, Jeremiah (Down, S.)||Thomasson, Franklin|
|Essex, R. W.||MacVeigh, Charles (Donegal, E.)||Thorne, G. R. (Wolverhampton)|
|Evans, Sir Samuel T.||M'Callum, John M.||Tomkinson, James|
|Everett, R. Lacey||M'Laren, Rt. Hon. Sir C. B. (Leicester)||Toulmin, George|
|Falconer, James||M'Laren, H. D. (Stafford, W.)||Trovelyan, Charles Philips|
|Ferguson, R. C. Munro||M'Micking, Major G.||Verney, F. W.|
|Fiennes, Hon. Eustace||Maddison, Frederick||Vivian, Henry|
|Findlay, Alexander||Mallet, Charles E.||Walsh, Stephen|
|Fuller, John Michael F.||Markham, Arthur Basil||Walters, John Tudor|
|Fullerton, Hugh||Marnham, F. J.||Ward, W. Dudley (Southampton)|
|Gibson, James Puckering||Massie, J.||Waring, Walter|
|Gill, A. H.||Middlebrook, William||Warner, Thomas Courtenay T.|
|Gladstone, Rt. Hon. Herbert John||Mond, A.||Wason, Rt. Hon. E. (Clackmannan)|
|Glendinning, R. G.||Montgomery, H. G.||Wason, John Cathcart (Orkney)|
|Glover, Thomas||Muldoon, John||Watt, Henry A.|
|Gooch, George Peabody (Bath)||Murray, Capt. Hon. A. C. (Kincard.)||White, Sir George (Norfolk)|
|Grey, Rt. Hon. Sir Edward||Myer, Horatio||White, J. Dundas (Dumbartonshire)|
|Gulland, John W.||Newnes, F. (Notts, Bassetlaw)||White, Patrick (Meath, North)|
|Hancock, John George||Nicholls, George||Wiles, Thomas|
|Harcourt, Rt. Hon. L. (Rossendale)||Nolan, Joseph||Wilkie, Alexander|
|Harcourt, Robert V. (Montrose).||Norman, Sir Henry||Williams, J. (Glamorgan)|
|Hardie, J. Keir (Merthyr Tydvil)||O'Brien, Patrick (Kilkenny)||Williams, Llewelyn (Carmarthen)|
|Hardy, George A. (Suffolk)||O'Connor, John (Kildare, N.)||Wilson, Hon. G. G. (Hull, W.)|
|Harmsworth, Cecil B. (Worc'r.)||O'Connor, T. P. (Liverpool)||Wilson, Henry J. (York, W.R.)|
|Harmsworth, R. L. (Caithness-shire)||O'Donnell, C. J. (Walworth)||Wilson, P. W. (St. Pancras, S.)|
|Harwood, George||Parker, James (Halifax)||Wilson, W. T. (Westhoughton)|
|Haworth, Arthur A.||Partington, Oswald||Wood, T. M'Kinnon|
|Hazleton, Richard||Pickersgill, Edward Hare|
|Healy, Maurice (Cork)||Pirie, Duncan V.||TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton.|
|Healy, T. M. (Loath, North)||Pollard, Dr.|
§ Amendment made: In Sub-section (7) after the word "make" ["make an additional assessment"], to insert the words "an assessment or."—[Mr. Lloyd-George.]
§ Mr. JOYNSON-HICKS moved in Subsection (7) to leave out the words "or within three years after the expiration thereof."
§ I quite agree that the Commissioners must have power to amend an assessment or to make an additional assessment during any time within the year of assessment, but I submit that in the case of the Super-tax "within three years after the expiration of the year of assessment" is too long 358 a period to allow. It would hang up the whole of a man's financial arrangements; if a man died it would hang up his estate for a period of three years. I suggest that the Chancellor of the Exchequer should meet us by reducing the time.
§ Mr. LLOYD-GEORGE
I regret I cannot accept the Amendment. The Sub-section simply gives the Commissioners the same power in respect of the Super-tax that they already have in regard to ordinary Income Tax.
§ Amendment negatived.
§ Question proposed, "That the Clause, as amended, stand part of the Bill,"359
§ Mr. JAMES MASON
I object to the machinery set up by this Clause on the ground that it is absolutely unnecessary, and that the tax, against which in itself as a matter of principle I have not raised my voice, could be equally well—in fact, more effectively—collected by the machinery already in existence. It has always been acknowledged that collection at the source has been the most beneficial step that this country has adopted in the system of collecting Income Tax. I am perfectly aware of the difficulties which were stated to exist in collecting at the source in the case of graduated taxes. These were pointed out by the Select Committee on the Income Tax. But I should like to point out, too, that it is by no means universally agreed that the objections that were raised at the time of the "investigation" were well maintained. I think it was only yesterday that we heard the right hon. Gentleman the Member for the Forest of Dean say that he for one did not accept the conclusions of the Committee. Really I think the objection which has been raised to collecting at the source in the case of this extra 6d. was that it would lock up a considerable sum of money—perhaps £15,000,000 or £16,000,000 during the year—to be refunded to the taxpayers. But there is no difficulty in that, for the machinery is already in existence for the purpose. The real question comes: Whether it is a real difficulty that this £15,000,000 or £16,000,000 should be partially locked up during the greater pant of the year. What is meant when you lock up that money during the year? Where is it? It does not lie, it is evident, in the pockets of the Income Tax Commissioners. The fact is that the money is passed at once, as soon as collected, into the Bank of England, and that it then does its work.
§ The locking up of a sum of money such as this would involve is by no means a very serious matter for either the nation or the business of the country as a whole or for individuals. It is quite evident that if that money is going to work in the hands of the bank during the year, that so far as the general commerce, industry, and business of the country is concerned, the locking up is merely a verbal quibble, and really means very little indeed. What it really means, of course, is that so far as the individual is concerned you collect £25 more in the £1,000 than you are justified in doing, and return it to him in the early part of the year. Objection has been raised that this would be a considerable cost to the country, but the machinery already exists for refunding in the case of the smaller incomes, and I maintain that any extension needed of that machinery which would be involved would be more than adequately repaid by an increase of power of effecting its purpose—an increased yield of the tax—which that machinery would have over what it has now. There is not the slightest doubt that a tax of this sort, dependent on an assessment partly made by the Commissioners and partly by the people themselves, is open to a very considerable amount of evasion and leakage. We all know that evasion and leakage of that kind has not only a material effect on others who have to make good the amount, of this evasion, but also has a demoralising effect on the taxpayers of the country as a whole. If it can be collected at the source that is the right way to collect it, and it ought to be so collected and not in the way that it is put forward in the Clause.
§ Question put, "That the Clause, as amended, stand part of the Bill."
§ The Committee divided: Ayes. 199; Noes, 82.361
|Division No. 698.]||AYES.||[12.0 p.m.|
|Abraham, William (Cork, N.E.)||Bennett, E. N.||Cornwall, Sir Edwin A.|
|Acland, Francis Dyke||Black, Arthur W.||Cotton, Sir H. J. S.|
|Adkins, W. Ryland D.||Bottomley, Horatio||Cowan, W. H.|
|Agar-Robartes, Hon. T. C. R.||Bowerman, C. W.||Craig, Herbert J. (Tynemouth)|
|Agnew, George William||Branch, James||Crosfield, A. H.|
|Ainsworth, John Stirling||Brunner, J. F. L. (Lancs., Leigh)||Crossley, William J.|
|Allen, A. Acland (Christchurch)||Burns, Rt. Hon. John||Dalziel, Sir James Henry|
|Allen, Charles P. (Stroud)||Byles, William Pollard||Davies, Ellis William (Eifion)|
|Baker, Joseph A. (Finsbury, E.)||Causton, Rt. Hon. Richard Knight||Davies, Timothy (Fulham)|
|Balfour, Robert (Lanark)||Channing, Sir Francis Allston||Davies, Sir W. Howell (Bristol, S.)|
|Baring, Godfrey (Isle of Wight)||Cherry, Rt. Hon. R. R.||Dewar, Arthur (Edinburgh, S.)|
|Barker, Sir John||Clough, William||Dickinson, W. H. (St. Pancras, N.)|
|Barnard, E. B.||Clynes, J. R.||Dobson, Thomas W.|
|Barnes, G. N.||Cobbold, Felix Thornley||Duckworth, Sir James|
|Barran, Sir John N. (Hawick B.)||Collins, Sir Wm. J. (St. Pancras, W.)||Duffy, William J.|
|Barry, Redmond J. (Tyrone, N.)||Cooper, G. J.||Duncan, C. (Barrow-in-Furness)|
|Benn, Sir J. Williams (Devonport)||Corbett, A. Cameron (Glasgow)||Duncan, J. H. (York, Otley)|
|Benn, W. (Tower Hamlets, St. Geo.)||Corbett, C. H. (Sussex, E. Grinstead)||Dunn, A. Edward (Camborne)|
|Dunne, Major E. Martin (Walsall)||Levy, Sir Maurice||Robson, Sir William Snowdon|
|Edwards, Sir Francis (Radnor)||Lewis, John Herbert||Roe, Sir Thomas|
|Elibank, Master of||Lloyd-George, Rt. Hon. David||Rogers, F. E. Newman|
|Erskine, David C.||Lundon, Thomas||Rowlands, J.|
|Essex, R. W.||Lupton, Arnold||Runciman, Rt. Hon. Walter|
|Evans, Sir Samuel T.||Lynch, H. B. (Yorks, W.R., Ripon)||Russell, Rt. Hon. T. W.|
|Everett, R. Lacey||Macdonald, J. M. (Falkirk Burghs)||Rutherford, V. H. (Brentford)|
|Falconer, James||Mackarness, Frederic C.||Samuel, S. M. (Whitechapel)|
|Ferguson, R. C. Munro||Maclean, Donald||Scarisbrick, Sir T. T. L.|
|Fiennes, Hon. Eustace||Macpherson, J. T.||Seddon, J.|
|Findlay, Alexander||MacVeagh, Jeremiah (Down, S.)||Seely, Colonel|
|Fuller, John Michael F.||MacVeigh, Charles (Donegal, E.)||Shaw, Sir Charles Edward|
|Fullerton, Hugh||M'Callum, John M.||Stanley, Albert (Staffs, N.W.)|
|Gibson, James Puckering||McKenna, Rt. Hon. Reginald||Stanley, Hon. A. Lyulph (Chesh.)|
|Gill, A. H.||M'Laren, Rt. Hon. Sir C. B. (Leices.)||Strachey, Sir Edward|
|Gladstone, Rt. Hon. Herbert John||M'Laren, H. D. (Stafford. W.)||Summerbell, T.|
|Glendinning, R. G.||Maddison, Frederick||Taylor, John W. (Durham)|
|Glover, Thomas||Mallet, Charles E.||Tennant, H. J. (Berwickshire)|
|Gooch, George Peabody (Bath)||Markham, Arthur Basil||Thomas, Sir A. (Glamorgan, E.)|
|Grey, Rt. Hon. Sir Edward||Marnham, F. J.||Thomasson, Franklin|
|Gulland, John W.||Massie, J.||Thorne, G. R. (Wolverhampton)|
|Hancock, John George||Middlebrook, William||Tomkinson, James|
|Harcourt, Rt. Hon. L. (Rossendale)||Mond, A.||Toulmin, George|
|Harcourt, Robert V. (Montrose)||Muldoon, John||Trevelyan, Charles Philips|
|Hardie, J. Keir (Merthyr Tydvil)||Murray, Capt. Hon. A. C. (Kincard.)||Verney, F. W.|
|Hardy, George A. (Suffolk)||Myer, Horatio||Walsh, Stephen|
|Harmsworth, Cecil B. (Worcester)||Nicholls, George||Walters, John Tudor|
|Harmsworth, R. L. (Caithness-Shire)||Nicholson, Charles N. (Doncaster)||Ward, W. Dudley (Southampton)|
|Harwood, George||Nolan, Joseph||Waring, Walter|
|Haworth, Arthur A.||Norman, Sir Henry||Warner, Thomas Courtenay T.|
|Hazleton, Richard||Nuttall, Harry||Wason, Rt. Hon. E. (Clackmannan)|
|Healy, Maurice (Cork)||O'Brien, Patrick (Kilkenny)||Wason, John Cathcart (Orkney)|
|Hedges, A. Paget||O'Connor, John (Kildare, N.)||Watt, Henry A.|
|Helme, Norval Watson||O'Connor, T. P. (Liverpool)||White, Sir George (Norfolk)|
|Hemmerde, Edward George||O'Donnell, C. J. (Walworth)||White, J. Dundas (Dumbartonshire)|
|Herbert, Col. Sir Ivor (Mon. S.)||Parker, James (Halifax)||White, Patrick (Meath, North)|
|Higham, John Sharp||Partington, Oswald||Wiles, Thomas|
|Hobhouse, Rt. Hon. Charles E. H.||Pickersgill, Edward Hare||Wilkie, Alexander|
|Holt, Richard Durning||Pirie, Duncan V.||Williams, J. (Glamorgan)|
|Hooper, A. G.||Pollard, Dr.||Williams, Llewelyn (Carmarthen)|
|Johnson, John (Gateshead)||Power, Patrick Joseph||Wilson, Hon. G. G. (Hull, W.)|
|Jones, William (Carnarvonshire)||Price, Sir Robert J. (Norfolk, E.)||Wilson, Henry J. (York, W.R.)|
|Jowett, F. W.||Radford, G. H.||Wilson, P. W. (St. Pancras, S.)|
|Keating, Matthew||Rea, Rt. Hon. Russell (Gloucester)||Wilson, W. T. (Westhoughton)|
|King, Alfred John (Knutsford)||Rea, Walter Russell (Scarborough)||Wood, T. M'Kinnon|
|Lamb, Edmund G. (Leominster)||Rendall, Athelstan|
|Lambert, George||Richards, T. F. (Wolverhampton)|
|Lamont, Norman||Ridsdale, E. A.||TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.|
|Lehmann, R. C.||Roberts, G. H. (Norwich)|
|Lever, A. Levy (Essex, Harwich)||Robinson, S.|
|Anson, Sir William Reynell||Gardner, Ernest||Peel, Hon. Wm. Robert Wellesley|
|Arkwright, John Stanhope||Gooch, Henry Cubitt (Peckham)||Pretyman, Ernest George|
|Balcarres, Lord||Gordon, J.||Randies, Sir John Scurrah|
|Baldwin, Stanley||Gretton, John||Ratcliffe, Major R. F.|
|Banbury, Sir Frederick George||Guinness, Hon. W. E. (Bury St. Edm.)||Renton, Leslie|
|Banner, John S. Harmood-||Hamilton, Marquess of||Renwick, George|
|Baring, Capt. Hon. G. (Winchester)||Hardy, Laurence (Kent, Ashford)||Roberts, S. (Sheffield, Ecclesall)|
|Beach, Hon. Michael Hugh Hicks||Harris, Frederick Leverton||Rutherford, John (Lancashire)|
|Beckett, Hon. Gervase||Hay, Hon. Claude George||Rutherford, Watson (Liverpool)|
|Bridgeman, W. Clive||Helmsley, Viscount||Salter, Arthur Clavell|
|Bull, Sir William James||Hill, Sir Clement||Sheffield, Sir Berkeley George D.|
|Burdett-Coutts, W.||Hills, J. W.||Smith, Abel H. (Hertford, East)|
|Campbell, Rt. Hon. J. H. M.||Hope, James Fitzalan (Sheffield)||Smith, Hon. W. F. D. (Strand)|
|Carlile, E. Hildred||Hunt, Rowland||Stanier, Beville|
|Carson, Rt. Hon. Sir Edward H.||Joynson-Hicks, William||Starkey, John R.|
|Cave, George||Kennaway, Rt. Hon. Sir John H.||Staveley-Hill, Henry (Staffordshire)|
|Cecil, Evelyn (Aston Manor)||Kerry, Earl of||Thomson, W. Mitchell- (Lanark)|
|Clive, Percy Archer||Keswick, William||Walker, Col. W. H. (Lancashire)|
|Clyde, James Avon||King, Sir Henry Seymour (Hull)||Warde, Col. C. E. (Kent, Mid)|
|Coates, Major E. F. (Lewisham)||Lane-Fox, G. R.||Williams, Col. R. (Dorset, W.)|
|Courthope, G. Loyd||Law, Andrew Bonar (Dulwich)||Wilson, A. Stanley (York, E.R.)|
|Craig, Captain James (Down, E.)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Winterton, Earl|
|Craik, Sir Henry||Long, Col. Charles W. (Evesham)||Wortley, Rt. Hon. C. B. Stuart-|
|Douglas, Rt. Hon. A. Akers-||Lonsdale, John Brownlee||Younger, George|
|Faber, George Denison (York)||MacCaw, William J. MacGeagh|
|Faber, Capt. W. V. (Hants, W.)||Mason, James F. (Windsor)||TELLERS FOR THE NOES.—Sir|
|Fell, Arthur||Morrison-Bell, Captain||Alexander Acland-Hood and Viscount|
|Forster, Henry William||Nicholson, William G. (Petersfield)||Valentia.|
|Foster, Philip S. (Warwick, S.W.)||Parkes, Ebenezer|