§ Mr. BOTTOMLEYasked the Secretary to the Treasury whether he was aware that in all cases where a married woman claimed and obtained a rebate or return of Income Tax the authorities insisted upon making out the order for repayment in the name of the husband; and whether he would take steps to have this practice remedied?
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)I am aware of the practice referred to by the hon. Member. Under the Income Tax Acts a married woman living with her husband is not entitled to prefer a separate claim for repayment on her own behalf. The claim must be made by the husband, and consequently the repayment is made to him. If, however, the husband authorises the Department to make the repayment to his wife, the money order is issued in her favour.
§ Mr. GIBSON BOWLESasked the Chancellor of the Exchequer whether, having regard to the 45th Section of the Income 1619 Tax Act, 1842, which provides that the profits of any married woman living with her husband shall be deemed the profits of the husband, and the same shall be charged in the name of the husband and not in her name or that of her trustee, the Income Tax Commissioners or the Special Commissioners propose to issue Super-tax notices to married women living with their husbands in cases where the husband has declared himself to be ignorant of his wife's income; if so, by virtue of what Section in what Act is it proposed to require from such a married woman a return of income not deemed to be hers but her husband's, and for which not she but her husband is chargeable, and in case such a married woman refuses to make a return what means have the Commissioners to compel her to do so; and will he, before sanctioning the issuing of such notices to such married women', consult the Law Officers of the Crown as to the legality of requiring a person to make a return for Income Tax of income declared by law to be the income not of that person but of another person, and required by law to be charged not in her name but in his name?
§ Mr. HOBHOUSEThis matter is receiving my right hon. Friend's attention.
§ Mr. BOWLESMay I ask if that information will be given before the Bill is introduced?
§ Mr. HOBHOUSEI hope so.
§ Mr. GIBSON BOWLESasked the Chancellor of the Exchequer was he aware that statements, dated 6th June, 1910, have been addressed to numerous persons by assessors of taxes and others, acting under the direction of the Commissioners of Inland Revenue and of Income Tax, stating that, in pursuance of the provisions of the Income Tax Acts, those persons are required to make a return for assessment of Income Tax for the year ending 5th April, 1911; and, in view of the fact that there was not on 6th June, and is not now, any Income Tax in existence for the year ending 5th April, 1911, can he explain by virtue of what authority a return can be required for that year by 27th June under penalty; and does he propose that in future returns for Income Tax shall be annually required before any Income Tax for the year of the return has been enacted by Law, before any Resolution fixing the rate of the tax has been introduced in this House, and while it is therefore uncertain what the 1620 rate will be, or whether there will be any Income Tax at all for that particular year?
§ Mr. HOBHOUSEThe answer to the first part of my hon. Friend's question is-in the affirmative. The authority referred to in the second part is contained in Section 30 of the Customs and Inland Revenue Act, 1890 (53 and 54 Viet. c. 8.) As regards the third part, my right hon. Friend does not propose to disturb the existing practice.
§ Mr. GIBSON BOWLESDo I understand that the Act which the right hon. Gentleman quotes gives authority to any official to call for returns or to assess a tax which does not exist in this case of Income Tax?
§ Mr. HOBHOUSEYes; it provides that the provisions contained in any Act relating to Income Tax which were in force on the preceding day shall have full force on subsequent days.
§ Mr. GIBSON BOWLESasked the Chancellor of the Exchequer, inasmuch as by Section 72 (2) of The Finance (1909–10) Act, 1910, the Income Tax Special Commissioners have power to require a return of total income from all sources to be made by any person whatever, whether chargeable or not with Super-tax, if he will state on what plan or principle or information the Special Commissioners act in serving notices for such returns upon some persons only and not upon others; and, seeing that there is power given by the Act to require such returns from all persons whatever, and that over-taxation and hardship are habitually and to a great extent inflicted upon persons entitled to exemptions and abatements by the system of deducting Income Tax at the source, will he consider whether there is now any reason for maintaining that system in addition to the system of universal declaration now authorised?
§ Mr. HOBHOUSEAs regards the first part of the question, the service of notices for Super-tax Returns is governed by considerations of presumed or possible liability. My right hon. Friend does not consider it desirable to abandon taxation at the source in accordance with the suggestion contained in the second part of the question. Perhaps I may refer my hon. Friend to pages 3 and 4 of the Report from the Select Committee on Income Tax, 1906, where it is pointed out that, when collection at the source was introduced, "the yield of the tax was almost doubled immediately."
§ Mr. GIBSON BOWLESThen why have His Majesty's Government so largely abandoned it in favour of collection through declaration?
§ Mr. HOBHOUSEThey have not abandoned it at all in the case of Income Tax.
§ Mr. DILLONDoes the right hon. Gentleman say that the instructions given are not to send a demand for a declaration except where there is a presumed or a possible liability for Super-tax—because they are being sent wholesale?
§ Mr. HOBHOUSEThat is so; but, of course, a presumed liability is sometimes found not to be a liability.
§ Mr. GIBSON BOWLESHow do you ascertain? Do you have spies, or what?
§ Mr. HOBHOUSEFrom information in the possession of the Income Tax Commissioners.
§ Sir J. D. REESWhy are not pensions, part of which the recipients have paid, deductible in assessing Income Tax?
§ Mr. HOBHOUSEThat is another matter which does not arise out of the question on the Paper.
§ Mr. MARTINasked whether income received by residents of the United Kingdom from investments in the Colonies or foreign countries was liable to Income Tax here if reinvested outside the United Kingdom and never brought here?
§ Mr. HOBHOUSEIf the income referred to falls within the scope of the 4th and 5th Cases of Section 100 of Schedule D of the Income Tax Act, 1842, and is not at any time received in, brought into, or remitted to the United Kingdom, it is not liable to Income Tax.