HC Deb 05 August 1912 vol 41 cc2849-51

  1. (1) Where any lands and houses are managed together as one estate then, notwithstanding anything in Section sixty-nine of the Finance (1909–10) Act, 1910, contained, the proportion of the cost to the owner of maintenance, repairs, insurance, and management upon which he is entitled to a return of duty under the said section shall be deemed to be twenty-five per centum of the total outlay upon such purposes for the whole estate, and it shall not be incumbent upon such owner to appropriate expenditure in separate statements of account to the different classes of property in respect of which repayment of the duty is authorised by the said Section.
  2. (2) For the purposes of the said Section annual value shall be deemed to be the average of the amount of rent received by the owner during the preceding five years.

Motion made and Question proposed, "That the Clause be read a second time."

Mr. C. BATHURST

I desire to move this Clause in the fewest possible words. The whole object of this is to assimilate the law to the existing practice in the case of all enlightened surveyors of taxes in the country. The object is to put a stop to the system, which is supposed to be rendered necessary by Sub-section 3 of Section 69 of the Finance (1909–10) Act, 1910, of separating into two different categories the expenditure in respect of maintenance, repairs, insurance, and management in the case of land and farmhouses on the one hand, and in the case of cottages on the other. The sole object of separating them is, as the right hon. Gentleman knows, in order to assimilate the practice to that under Section 35 of the Finance Act, 1894, under which an abatement of one-eighth was allowed in the case of lands, which included for this purpose farmhouses, and one-sixth in the case of cottages—that is to say, for buildings upon an estate. It is now possible to obtain an abatement of the full amount of 25 per cent., but because it is necessary to assign different properties to the different categories it becomes impossible in many cases where the expenditure upon the cottages exceeds 25 per cent., and the expenditure upon the land is almost necessarily considerably less than 25 per cent., to obtain an aggregate of 25 per cent. in respect of repairs over the whole of an estate.

The right hon. Gentleman has often expressed his sympathy with the idea that every encouragement should be given to landowners to spend as much as possible upon their cottages, and the sole object of this Clause is to enable the 25 per cent. to be spent in every case, whether or not under one head the amount exceeds 25 per cent. and under the other head is less than 25 per cent. As a matter of fact, the right hon. Gentleman has, I understand, already given instructions to various surveyors throughout the country to adopt this practice of allowing an aggregate of 25 per cent. without carefully criticising the two different schedules under which that percentage is allowed, and a large number of surveyors are now, contrary to the strict letter of the Act, allowing this system which I propose. All I ask is that the practice should be the same all over the country, and that, I understand, can only be done by modifying the provisions of Sub-section 3 of Section 69 in order that 25 per cent. may be allowed in all cases, and so give a direct encouragement to the expenditure upon cottages as contrasted with land.

Mr. LLOYD GEORGE

I understand in certain districts this is the practice, and it seems to me a matter much more of administration than of amending the Finance Bill. I am told that this Clause as drafted may in some cases give greater relief than the present law, but that in the majority of cases it would give less. I do not know whether it would be quite in order for that reason, though I am not raising that point now, and perhaps the hon. Gentleman will allow me to look into that matter. My desire is that those who spend money on cottages should have the full advantage of the expenditure when the duty comes to be reckoned. It would be a pleasure to me to see that that practice was put into operation.

Mr. C. BATHURST

I am very much obliged to the right hon. Gentleman for the attention he has given to this point. Perhaps it might be possible on Report to draft a clause which would meet his views and mine at the same time. It is the case of small landowners which has got to be safeguarded. The only other thing I should like to tell the right hon. Gentleman is that this Sub-section 3 of Section 69 has been repeatedly submitted to Counsel, and on each occasion so far as I am aware the considered opinion of Counsel has been to the effect that under the section as it stands it is necessary to separate out the two different kinds of property under the two different schedules. For that reason I submit there should be a differentiation under the Act.

Mr. WEDGWOOD

I hope the right hon. Gentleman will not either on the Report stage or at any future time accept this proposal. It means that where you have two estates owned by one proprietor who spends a great deal of money on the one estate and starves the other, he is to take the money he spends on his pet estate and spread it over both estates. That seems to me very undesirable, because such expenditure is very often a wasteful form of expenditure. I do not think we want to enable a man to spend a great deal of money on one estate and use that in order to exempt another estate. I hope the Chancellor of the Exchequer will not accept this Amendment.

Mr. BATHURST

I should like to ask the leave of the House to withdraw this Amendment in view of what the right hon. Gentleman has said.

Proposed Clause, by leave, withdrawn.