CLAUSE 2.—(Income Tax for 1912–13.) (Hansard, 26 July 1912)

§ Mr. POLLOCK

had given notice of an Amendment to insert, at the beginning of the Clause, the words, "After the commencement of this Act."

This is an important Amendment, especially after what has been said this morning, and its object is to emphasise the fact that it is the Act of Parliament which alone authorises and gives statutory authority for the collection of these taxes. Up to the present time doubts have been expressed as to the necessity for the Act, and it has been suggested in some quarters that the Resolution is sufficient. But our own practice rather indicates that a mere Resolution is quite insufficient, because in our Procedure it is laid down:— A Resolution passed by Committee of Ways and Means requires confirmation by Act of Parliament. It is made equally clear in another Section, which lays it down that:— A Resolution passed by the Committee of Ways and Means, when agreed to by the House, requires confirmation by Act of Parliament. This Amendment is designed to make it perfectly clear to all persons that it is the Act of Parliament which gives the effective authority under which Income Tax is collected. May I remind the Committee how matters stand at the present time. There is a Section in the Act of 1890 which says that in order to ensure collection in due time the provisions of the previous Income Tax are to be held to have force as if the duties were actually granted by Act of Parliament, and clearly the object of that is to keep standing the machinery that is absolutely necessary to enable the Inland Revenue authorities to issue papers and require answers and statements of income on which the tax is to be eventually paid. It has, I believe, been held by the Law Officers of the Crown that the Income Tax Acts for previous years do not give effective statutory authority for the new collection until a Statute has been passed. A difficulty arose in connection with working under a Resolution, and not under a Statute in the year 1902. In that year under a Resolution in Committee of Ways and Means, a large amount of Loan Stock was issued under the Loans Act, 1901. The Resolution was passed on 27th April, 1902. The Act which gave statutory authority to that Resolution did not receive the Royal Assent until August. In consequence of the long period which elapsed between the passing of the Resolution and the Royal Assent being given, a dividend accrued due on the stock. The Treasury were placed in a difficulty, 1594 whether they should act on the Resolution, or require statutory authority before the money was paid. The Comptroller and Auditor-General was advised by the Treasury that he could pay the money, and with very great reluctance he did so. He determined that he could only pay it if the opinion of the Law Officers of the Crown was taken. That opinion was taken, and it was held that there was no authority whatever to pay that dividend, and that it had been wrongly paid because it was paid in pursuance of a Resolution of the Committee of Ways and Means, and not in pursuance of statutory authority. It was held that there was no debt, that there was no statutory authority for the loan, and, therefore, there was no statutory authority for the dividend. That matter came before the Public Accounts Committee in 1903, and the Comptroller and Auditor-General asked that his action might be excused on the ground that he was placed in a difficulty. The purpose of my Amendment is to make it quite plain that it is the Act of Parliament which is the real authority, and that no Resolution of the House of Commons can be claimed to have a statutory or effective legal authority. If we pass the Amendment the Clause will run:—

"After the commencement of this Act Income Tax for the year beginning on the sixth day of April nineteen hundred and twelve shall be charged at the rate of one shilling and twopence, and the same Super-tax shall be charged, levied, and paid for that year as was charged for the year beginning on the sixth day of April nineteen hundred and eleven."

The effect will be that when the Bill has been passed the full collection of Income Tax can be made for the year. It will emphasise the fact that there is need for the Bill to be passed into an Act as rapidly as possible.

And, it being Five of the clock, the Chairman left the Chair to make his Report to the House.