§ (1) If an application is made for the purpose of such manner and form as may be prescribed by the Commissioners of Inland Revenue, cither by a husband or wife, within six months before the commencement of any Income Tax year—
- (a) Income Tax (including Super-tax) for that year shall be assessed, charged, and recovered on the income of the husband and on the income of the wife as if they were not married, and all the provisions of the Income Tax Acts with respect to the assessment, charge, and recovery of Income Tax (including Super-tax), and the penalties for failure to make a return, shall apply as if they were not married; and
- (b) All the provisions of the Income Tax Acts which relate to claims for exemption, relief, or abatement, and the proof to be given with respect to those claims, shall also apply as if they were not married; and
- (c) The income of the husband and wife shall be treated as one in estimating the amount to be repaid or allowed in respect of any exemption, relief, or abatement which depends wholly or partially on total income, and the total amount of any exemption, relief, or abatement given in respect of the incomes of the husband and wife shall not exceed that which would have been given if an application had not been made under this Section; and
- (d) The benefit of any such exemption, relief, or abatement may be given either by way of reduction of assessment, or by repayment of any excess of tax which has been paid, or by both of those means, as the case requires, and shall, in the case of relief given in respect of earned income, be given in proportion to the income earned respectively by the husband and the wife, in the case of relief given in respect of insurance premiums, be given to the husband or wife, as the case may be, by whom the premium is paid, and in any other case be given in proportion to the respective incomes of the husband and wife; and
- (e) For the purpose of any exemption, relief, or abatement, a return may be made by the husband or the wife
539 of the total income of the husband and wife, but if the Commissioners of Inland Revenue are not satisfied with such return they may obtain a return from the wife or husband, as the case may be; and
- (f) The income of the husband and wife shall be treated as one in estimating total income for the purpose of Super-tax, and the amount of Super-tax payable in respect of the total income shall be divided between the husband and wife in proportion to their respective incomes, and the total amount payable shall not be less than it would have been if an application had not been made under this Section.
§ (2) The Commissioners of Inland Revenue may require returns for the purposes of this Section to be made at any time, and Section fifty-five of the Income Tax Act, 1842, shall, with the necessary modifications, apply in the case of the refusal or neglect to make or wilful delay in making any such return.
§ (3) Where Income Tax (including Super-tax) is charged on the profits or income of a married woman, whether in the name of her husband or separately in pursuance of this Section, the power to distrain in the case of non-payment of any Income Tax payable by the wife shall extend to the goods and chattels of the wife as well as to the goods and chattels of the husband.
§ (4) Section eleven of the Revenue Act, 1911 (which relates to the assessment and recovery of part of the Super-tax from the wife in certain cases) shall cease to have effect; and Section five of the Finance Act, 1897 (which relates to the exemption of the income of a married woman in certain cases), shall not have effect in a case where an application has been made under this Section.
§ Sir J. SIMON
I beg to move, in Subsection (1) to leave out the words "commencement of," and to insert instead thereof the words "sixth day of May in."
When this Clause was in Committee the question was raised whether it was really necessary to insist that the latest date for making the demand for separate assessment should be the beginning of the Income Tax year. The suggestion was made that it might be possible to allow claims to be made a month later than that. I promised to have the matter considered. It 540 has been considered carefully, and I am glad to say that it seems possible to meet that suggestion, not indeed by saying a month after the notice has been given, but by moving the date on a month, and making it the 6th May instead of the 6th April. I hope the House will agree that that is an improvement. It can be allowed without prejudice to the practical working of the scheme, and we are very glad to make it in the general interest.
§ Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
§ Question proposed, "That the words 'sixth day of May in' be there inserted."
§ Mr. LEES SMITH
I beg to move, as an Amendment to the proposed Amendment, to leave out the word "May," and insert instead thereof the word "June."
This Amendment is a concession made in response to a fairly long discussion, and it is one which I am sure those who took part in the discussion will appreciate. But I would point out that the extension of the date by one month will make all the difference in the world to the actual effectiveness of the Amendment. Under the Clause married people have the right to appeal for a separate assessment. They have to make a fresh appeal each year. The Chancellor of the Exchequer proposes that they shall make that appeal by the 6th May—that is, one month after the beginning of the Income Tax year. I suggest that the 6th June would be a better date, for this reason. I have never heard of anybody saying to himself on the 6th April, "This is the beginning of the Income Tax year; therefore, I must begin to think about my abatements, my life insurance, and number of my children, and so on." What everybody does, and what I believe the Inland Revenue expects us to do, is to wait until we receive our form of return—I think that is what the large document which we receive is called—and then to consider our payments and abatements. It seems to me fair and reasonable that in the same way married women who make this claim should be allowed to make it after they have received their form of return. The date that the Chancellor of the Exchequer has chosen is 6th May, which comes in the very thick of the time when these forms of return are being sent out—in fact, most of them are sent out rather later. The result will be that a certain number of 541 married women will make the claims to which they are entitled, and the majority of them will find that they have made their claims just two days, or a week, or perhaps three weeks, late.
I think it will be very inconvenient if this concession, which the whole House approves of, should be so given that married women who wish to claim under it—in the comparatively few cases where they will do so—find that in practice that their right is whittled away, and that they are tripped up by the difference of a few days in the day. That is why I propose 6th June. At that time these forms of return will have been sent out. The Attorney-General mentioned the question of the difficulties of administration. I am fairly certain that no difficulties of administration would arise by extending the date one month. None of the assessments are made until, at any rate, the middle of July, and most of them are not made until September. In places like the City of London they are not made until October. Therefore, from the point of view of the Inland Revenue, 6th June is a time when most of the assessors and surveyors of taxes would have at the least a period of six weeks—in most cases a period of three and a half months—to prepare these separate assessments for married women. I think, therefore, that this is a reasonable extension which will not create any administrative difficulties which are not present in the Amendment as it already stands.
§ Sir J. SIMON
It is a very natural thing for the hon. Member to seek to extend the month which the advisers of the Government say is what is most consistent with administrative convenience to the two months which the hon. Member suggests will be consistent with administrative convenience. In this matter one munst have some regard to the reasoned advice which is offered by those who have actually the duty of administrating the Act. I might give my hon. Friend one example of the difficulties which will arise if you postpone the date too long, and I give it with the more assurance because it does not appear to have occurred to him. Supposing we test the matter in this way: Let us assume that the hon. Member's rights are not exercised until the last day. If on the last day it should occur to him, being the 6th of June, to claim for a separate assessment, the claim may be made by either the husband or the wife, not necessarily by 542 both. Say it is made by the husband on the 6th of June. That would be the first moment that the revenue would know that they will have to seek for a separate return from the other party. The other party will be entitled to the full allowance of time which the law gives. The hon. Member will see that that illustration at once carries him to the month of July. As he very accurately says, some assessments are made in the month of July. But assessments are not made in five minutes. It may be that a certain amount of inquiry has to take place. The wife may deny that she has an income, and so may the husband, although the revenue authorities are certain that one or the other, or both, have the income. There is thus a perfectly good reason why the concession should be limited to one month—which I would remind the hon. Member was what was asked by those who urged the matter upon the Government in Debate the other clay. That, of course, does not in the least rule out my hon. Friend from making a further suggestion. It hardly, I think, justifies the view that the proposal now made commends itself to many people who want to make this provision a reality and not a sham. For these reasons, though I am very sorry to have to refuse the request of my hon Friend, I must do so, and I am acting on the very best advice that I can get.
§ Amendment to proposed Amendment, by leave, withdrawn.
§ Sir J. SIMON
I beg to move, in Subsection (1), paragraph (b), after the word "married" ["shall also apply as if they were not married"], to insert the wordsand a claim under Section five of the Finance Act, 1897 (which relates to the exemption of the income of a married woman in certain cases), may be made by the wife as well as by the husband.This Amendment must be read by the House in conjunction with the two Amendments that follow, all three of which are down in the name of my right hon. Friend. These three Amendments are put down in order that we may fulfil several promises which I gave the other day in Committee. I not only promised to look into the matter which we have just disposed of, but to see whether it was possible to amend the married women's Clause in such a way as 543 not to put people to the choice of either enjoying the provisions of Section 5 of the Finance Act of 1897 or of enjoying the benefits of the new Clause, but to see whether we could not devise a scheme by which, in proper cases, they could enjoy the benefit of both. The House will perhaps remember what the benefit of Section 5 of the Finance Act of 1897 is. Supposing you have a husband and a wife who between them have a total income of not more than £500 a year: supposing, moreover, that a portion of that income, say as to £100, is earned by the wife; then, however you make up the balance in that case, the Act of 1897 permits an application to be made by the husband to have a separate assessment in this sense—that the income which his wife earns is to be assessed separately and entitled to abatement or exemption according to this amount, exactly as though it were not combined with any other income, and the rest of the income, the £400 that I have used as an illustration, is again to be assessed separately, and is to enjoy the exemption or abatement, as the case may be. Under the provisions of the Act of 1897 hon. Members will see that only two conditions need to be specified to enjoy the exemption. One is that the total income should not be more than £500, and the other is that the wife should earn some of it. It is not so easy to combine that with our new Clause, which allows the husband and wife to claim that there should be separate assessments, and the difficulty arises for this reason, that the right exercised under the new Clause of division between the incomes is not between the income the wife earns and the rest of the income, but is the income belonging to the wife, earned or unearned, and the income belonging to the husband, earned or unearned. I confess I thought it was not possible to combine the two. I saw that the hon. Member for St. Pancras (Mr. Cassel) held another opinion, and though he did not suggest at the moment how it could be done, his belief in fitting the two things together was well warranted. I hope he will agree that the proposals we make will fit them together. It is necessary to do three things which are done in these Amendments. The one which you put from the Chair, Mr. Deputy-Speaker, has this effect: Supposing Section 5 of the Finance Act of 1897 is going to be taken advantage of instead of its being taken advantage of by the 544 husband claiming that the wife's earned increment should be separately assessed, the wife may claim that her earned income may be assessed. So far this removes what some people may call a sentimental grievance, because it makes no difference in pounds, shillings and pence, but it puts her in a position in which she would be under our Clause and enables her to claim in her own name what, under the Act of 1897, should be claimed by the husband. In the second Amendment we require, in line 14, the necessary exemption which hon. Members will find printed on the Paper, because under Sub-section (c) of our Clause the income of the husband and wife is to be treated as one. The object of that provision is to prevent the subdivision of the joint income resulting in exemption or abatement being claimed twice—by one in respect of one-half of the income and by the other in respect of the other half. Under the Act of 1897 you did allow exemption and abatement in respect of both halves, and we introduce that exception under Sub-section (c). The third Amendment is on line 25, and the reason for that is that our new Clause provides that in the event of sub-division being applied for—the sub-division is between the income of the wife on the one hand, and the husband on the other—whereas that is not the way the line is drawn under the Act of 1897, consequently it is necessary here to provide, when that expression comes in, for the provision of the abatement in proportion to the earned income, as this abatement is specifically given in respect of the wife's income, which seems on the whole the right idea, in respect of earned income, and the result of it is that everybody who could have previously taken advantage of the Act of 1897 will still be able to do so. That will not affect their rights under the existing law, because the wife will be able to claim in her husband's name, and at the same time we manage to reconcile these two statutory provisions so that they fit together, and I hope hon. Members will feel that these three Amendments, regarded as part of the whole, do really adequately meet the rather difficult case which was pressed upon us during these discussions.
§ Mr. CASSEL
I think that the three Amendments which the right hon. Gentleman has referred to are a great improvement on the Clause and meet a real grievance which would have existed without 545 them, because under the Clause, where the joint income is under £500, it would have deprived the husband or wife of availing of the benefits of this Section or the benefits they would otherwise receive under the Act of 1897. I agree with the right hon. Gentleman it was an extremely difficult matter to draft words that would so amend the Clause as to remedy that grievance. I think the right hon. Gentleman has skilfully succeeded in doing so, and I am grateful for the trouble he has taken.
§ Sir A. MARKHAM
I think the right hon. and learned Gentleman has skilfully succeeded in completely fogging my mind by taking these three Amendments together. The first one is easy to understand, but on the last two I am hopelessly at sea.
§ Sir J. SIMON
I beg to move, in paragraph (c), after the word "income" ["which depends wholly or partially on total income"], to insert the words "(except so far as otherwise required for the purpose of dealing with any claim for exemption, relief or abatement under Section five of the Finance Act, 1897)."
I do not want to repeat myself, but, as the hon. Baronet tells me that I have "produced confusion," perhaps I may say a few words. Will the hon. Baronet follow for a moment, and I think it will become quite clear? Under Sub-section (3) the income of the husband and the wife shall be treated as one in estimating the amount to be paid or allowed I will give an illustration which the hon. Baronet can follow. So far as this new Clause is concerned they were entitled, husband and wife, to be separately assessed. That does not mean if the total income is £320, £160 of which belongs to one and £160 to the other, that the result of the Clause would be that no Income Tax is paid by either, because they cannot each say that the first £160 is not to be taxed. But we must except from that general rule the case we are now bringing in, because under tht Act of 1897 it is the fact that you allow separate exemption to be claimed by each of the two parties without lumping them together. That is the reason why we are moving to insert in brackets the words of this Amendment.
§ Sir J. SIMON
I beg to move, paragraph (d), after the word "income" ["in respect of earned income"], to insert the words(including any exemption, relief, or abatement given in respect of the profits of a wife from a business in pursuance of Section five of the Finance Act, 1897).
§ Mr. CASSEL
I beg to move to leave out Sub-section (3).
I quite agree that some of the later Amendments down in the name of the Chancellor of the Exchequer if inserted, will mean that this Sub-section will be improved because it is now proposed, not to empower the Commissioners to levy a distress upon the wife's goods for the husband's tax. That is to be done away with. But you still leave the power to levy a distress upon the husband's goods for what is now the wife's tax. Under the existing law, apart from this claim under the Section, the husband was liable for the whole of the tax. He included his wife's income in his return and he was liable to have his goods distrained upon. Now you have a different position. An assessment is made upon the wife. The husband has no power of disputing the returns. She may accept a return which he would consider to be too high, she may not pursue her right to which she is entitled in disputing that assessment, and the amount of the tax is fixed under the present procedure upon the wife and the husband. I venture to say there is no case under the law at present in which the husband can be made liable for the liability of the wife where the husband has not got the opportunity of disputing that liability. Here you are going to make him liable without any power of disputing the liability. You do not even make it necessary as a condition that you should levy the distress on the wife's goods. The Commissioners, although they may know that there are goods belonging to the wife, may levy the distress on the husband's goods without any demand and without any opportunity of the husband disputing the claim. I do not suppose that the Inland Revenue Commissioners would exercise their powers to this extent, but Parliament is responsible for what it puts in an Act of Parliament, and on these grounds I think this Sub-section ought to be omitted.
§ Sir J. SIMON
I regret that I cannot accept the proposal made by the hon. and learned Member opposite to omit Subsection (3). No doubt that Sub-section, as we propose to amend it, will leave the possibility of the husband's goods being-seized in order to pay his wife's tax, but if the hon. and learned Gentleman will consider the practical side of this matter, he will see that it really is impossible as the result of permitting this separation between the wife's assessment and the husband's assessment, to leave the Inland Revenue Commissioners in the position that unless they are able to decide which goods are the husband's and which are the wife's, they shall be exposed to any number of interpleader actions. Our proposal does not involve any grievance of certain married women. This is the case in which the husband's furniture is taken to pay for his wife's tax. Although the hon. and learned Gentleman opposite said there was no precise analogy there are plenty of cases where husbands have to be answerable for some of their wife's liabilities. Many people think the law in this respect is unduly harsh on the man because the husband is answerable in damages for tort which his wife commits. A husband is liable if his wife libels somebody or assaults somebody, or commits some other wrong entirely against his instruction, or in spite of the announcement that he repudiates all responsibility. Even under those circumstances the responsibility attaches to him just the same. A husband is responsible for his wife's contractual debts, or for that large proportion of them which are regarded as providing a wife with necessaries.
There is no such corresponding liability on the wife in regard to the husband's contractual debts. A wife has not to pay for damages in a libel action against her husband, and she is not responsible for her husband's tailor's bills. Therefore, if there is to be any distinction drawn, the hardship in these cases is on the side of the husband and not on the side of the wife. If this hardship is to be corrected the Government cannot begin when engaged in collecting the revenue. As far as the revenue is concerned, it must be collected, and in view of the fact that this is the existing law and has been ever since the Income Tax started, and you might in the last resort seize goods belonging to a husband to collect the Income Tax which is due from any portion of the income of the home whether it is the income of the 548 husband or the wife, we do not feel able to depart from that practice. But in order that nobody should say that a Clause which is designed to right certain wrongs under which married women suffer should deliver a backhanded blow at the expense of married women, we propose to make it where husband and wife are separately assessed that we should not seize the married woman's goods to pay her husband's taxes. Somebody must be answerable for the taxes of the common home and since it is impossible for the Inland Revenue to find out which wedding presents belong to the husband and which to the wife, it is necessary to stick to a machinery which has been working ever since the Income Tax started and call upon the husband to pay the tax. It is not a case which often arises.
§ Mr. CAVE
I agree that this Clause as proposed to be altered will not leave a woman's grievance, but it will create a mail's grievance. As the Attorney-General has stated, a man stands already in a position very much less favourable with regard to his wife's debts than the wife stands in regard to her husband's debts. There is no question in this Amendment of correcting that inequality. The point is that the Government are going to extend it and create anew disadvantage. Whatever the liability of the husband is, at all events he is not liable for his wife's debts incurred in respect of her separate property. Now you are going to make the husband responsible, so far as his goods go, for debts of that character, and you are going to do it in an extremely unfair way. Because ex hypothesi the wife has income in respect of which she is liable to Income Tax. If proper notice is given, the assessment to Income Tax is going to be sent to her and the husband may never see it. She may object or not, but at all events she will be assessed. The demand for the tax is going to be sent to her and not to her husband; in fact, the husband may never see it. One fine day, without any notice or warning of any kind, the husband may find the Government officer in his house and his goods distrained upon for his wife's tax. This kind of thing is not only extremely unpleasant, but it is very injurious to a business man to have that kind of process in his house.
Unfortunately, wives and husbands do not always agree, and the wife may allow that kind of result to ensue. I do not think that is right, and I thought the Attorney-General would 549 have accepted the principle of the Amendment which my hon. and learned Friend has put down on this Clause by which no distraint is to be levied on the man's goods until he has had notice and a demand for payment. That surely is a very moderate suggestion indeed, and I do not see how that proposal can be fairly resisted. The learned Gentleman says that the Government officers ought not to be expected to distinguish between the husband's and the wife's goods. That is all very well, but in the case in question the wife has an income, and why should they not go against her income rather than against the husband's goods and property? The difficulty as regards distinguishing arises every day. There are thousands of cases in which a man's goods are seized and somebody else intervenes. That is the kind of difficulty which is dealt with every day, and I do not think it ought to be raised as against the suggestion that in justice the husband ought not to have his goods seized for debt not incurred by him but by his wife, who for this purpose is made a separate person, and incurred by her in regard to her own separate property for which he is in no way liable. I think a strong case has been made out either for the omission of this Sub-section or, at all events, for the adoption of the Amendment of my hon. Friend as a proviso to the Section, so that at least a man may have a demand made upon him before he is subjected to the indignity and injury that may be caused him under this Clause.
§ Mr. JAMES HOPE
I speak only as an ignorant layman seeking knowledge, but I want to ask the Attorney-General what would be the effect under this Sub-section if the husband had issued the ordinary statutory notice that he was not responsible for his wife's debts. Would that affect his liability under this Section, or would it not?
§ Mr. J. HOPE
In the second place, how would it operate in the case of a legal separation. If the husband and wife were legally separated, would the liability of the husband under this Section continue? Before we vote on this we ought to be quite clear as to those two matters, and when I speak as an ignorant layman I am sure there are plenty of others in the same position in the House.
§ Sir A. MARKHAM
I think we ought to have a reply to the questions raised by the hon. and learned Gentleman opposite (Mr. 550 Cave), and the last speaker. It seems to me that the request put forward—that before you distrain on the goods and chattels of the husband, who may be quite an innocent party, he should, at all events, have notice—is a very reasonable one. Surely the Attorney-General will grant that without referring to the Chancellor of the Exchequer. It is purely a question of equity. I think we ought also to have some reply to the question how this Clause would operate in the case of a husband and wife living apart when they are legally separated. The Bill will soon proceed to its Third Beading, and we cannot go back on it again. I hope the Solicitor-General, therefore, will give the matter his consideration, and see whether there is time to put the Clause right in the way suggested by the hon. and learned Gentleman opposite
§ Mr. BOOTH
This is one of those well-known cases which to the layman often causes surprise. It is generally assumed that women in some way or other suffer an injustice from this House, but whenever we come to close quarters, we generally find that learned Gentlemen on both sides of the House get up and assure us that women have the advantage as against the male sex. That being so, I think we ought to be very careful about extending it. Even the champions of the female sex, as far as I know, do not go beyond pleading for equality. If there were equality in this case, it is very evident to me that a woman with personal property of her own would be as liable for the Income Tax of the husband as a man with his own separate property is liable for the Income Tax of his wife. It is all very well for the Law Officers to say that they are only extending a principle which exists now in law, but I am not quite sure that is a sufficient answer, because it is acknowledged now that the female sex have the advantage. The illustration about a man being liable for his wife's debts was given. This is purely a case of the Income Tax.
In many cases a hard-struggling man marries a wife with a considerable amount of property. Her income may be three or four times his income, but he is liable to pay her Income Tax, and she is not liable under any circumstances to pay his Income Tax. They say that is the present law. If the hon. and learned Gentleman is correct, they are extending this principle and therefore making it still more unequal. I should have thought, if that were so, there was all the more reason for this 551 additional safeguard, of which the hon. Member for the Mansfield Division (Sir A. Markham) has spoken. I can conceive a case in which the husband and wife live under what are called modern advanced ideas. They decide, as far as money matters are concerned, to be totally independent. The modern husband says, "You can have the use of your own money, and I will not ask you to give any account how you spend it." I do not think that even my hon. Friend would say that he was justified in calling into question this justifiable reticence where they both have assured means. Women, however, are not always brought up in business habits, and when they get these notices they do not always file them or deal with them in the way that a man does in an office who has a cashier or a secretary. They do not always see the importance of them, and they may put them on one side because they have a pressing social invitation, and forget all about them. The consequences do not fall upon the woman, but upon the man. I think there should be some kind of demand made upon him before distraint is levied upon his goods, and I hope we shall receive some answer from the Front Bench on the points properly put by the hon. and learned Gentleman opposite.
§ Sir S. BUCKMASTER
I think a few moments will enable me to deal satisfactorily with the points raised by the hon. Member for Sheffield (Mr. J. Hope). It is quite plain that you will not be able to get any escape from the liability of the husband for the wife's tax unless the parties are living separately. No notice will get rid of that obligation. But if the parties are living separately, the Income Tax authorities at the present moment always regard the woman as a femme sole. Indeed, the liability of the husband for the wife's tax only arises when the woman is living with her husband. If they are living apart and properly separated, there is no trouble.
§ Sir S. BUCKMASTER
No, all this does is to apply certain existing provisions of 552 the Income Tax Acts, so as to alter the right of the wife and of the husband in particular respects. There is nothing further. That at any rate is our view. For the rest there is an Amendment later on proposed by the hon. Member for St. Pancras, to Clause, 9, and I think it will meet some of the objections raised if we accept a modification of that Amendment. The modification that we would be prepared to accept would be in these terms:—Provided that no distraint shall be so made on the goods or chattels of the husband, unless a written demand for payment shall first have been made on the husband, or left at his usual place of residence, and he shall have failed to pay the amount of the tax payable by his wife within seven days' of such demandThat enables notice to be given the husband in cases where harsh proceedings are to be taken. To that extent we can meet the hon. and learned Member. But we cannot go to the extent of relieving the husband of ultimate liability to pay the tax.
§ Mr. CASSEL
In view of the fact that the Government have made a substantial concession, I shall be prepared to withdraw my Amendment. But I wish to say that, personally, I do not regard it as going far enough. I accept it because I cannot get any more, but I still think it is a hardship that a husband shall be made liable in a case where he has no opportunity of disputing his liability.
§ Amendment, by leave, withdrawn.
§ Sir J. SIMON
There are two Amendments on the Paper which must be regarded together. They are down in the name of the Chancellor of the Exchequer. My explanation of them is this: As this Subsection was originally drafted, it provided that the Income Tax on a married woman's property, assuming she is to be treated separately from her husband, shall be recoverable on the goods of either the husband or wife, and the arrangement was mutual in this respect; the wife's goods were answerable for the husband's tax as well as her own, while the husband's goods were answerable for the wife's tax as well as his own. We propose to make a change in the Clause so as to make it run in this way. I will read Sub-section (3):—Where the Income Tax (including Super-tax) is charged on the profits or income of a married woman"—553 We propose to leave out the next phrase, "whether in the name of the husband or separately"—in pursuance of this Section, the power to distrain in the case of non-payment of any Income Tax payable by the wife shall extend to the goods and chattels of the husband as well as the goods and chattels of the wife.I think in that form it will be quite clear, as far as a married woman's own property is concerned, her property will in no circumstances be liable for anything other than her own tax, whereas, on the other hand, the husband's property will be liable, not only for his own tax, but for his wife's tax as well.
§ Amendment made: In Sub-section (3) leave out the word "wife" ["chattels of the wife"], and insert instead thereof the word "husband."—[Sir J. Simon.]
§ Sir J. SIMON
I now beg to move, at the end of the same Sub-section, to leave out the word "husband," in order to insert instead thereof the word "wife."
§ 9.0 P.M.
§ Mr. RAWLINSON
I raised a point on the Committee stage which I wish to raise again here. I put it to the learned Solicitor-General, that the law, as it stands at the present time, applies to the goods of the husband even when he is not living with his wife. I am fully aware of the circumstances under which separate assessments can be made if the husband and wife are living separately. But assuming that they are living together, and notice is given six months before the end of the financial year that they desire to be separately assessed, the assessments are made separately, and that subsequently they become separated, then this Section will at once operate, and the effect will be that the husband's goods will be liable to be seized under this Section, although he may have been separated from his wife for the rest of the year. I venture to submit to the hon. and learned Gentleman that he should put in some words which would do away with what would be an obvious injustice. I hope I have made my point clear. I am fully cognisant of the fact that at present, under this Sub-section, the husband and wife living together and giving notice six months before the end of the financial year that they wish to be separately assessed, there will be still power of distraint. But I want the Government to apply a remedy for an in- 554 justice which certainly is not intended, by inserting some such words as I have suggested.
§ Sir J. SIMON
I quite realise the point put by the hon. and learned Gentleman, but I would suggest to him that there is some reason for another view. I would not be so dogmatic as to suggest that my view is the only possible view. The way in which I would put it to him is this: As things stand at present if the wife lives separately from her husband she is, as a matter of fact by Income Tax law, treated as a separate person. In many cases the authorities do not know she is married, and they treat her as a widow or as a single lady. It is undesirable that we should do anything to upset that, and I certainly should be unwilling to do it by a side wind. If you look at Clause 9 broadly, you will see it is obviously designed to deal with cases where, unless application is made in a given period the husband and wife who live together will be assessed as one. But if application is made then they will be assessed separately. If that is the groundwork of the Clause, the hon. and learned Gentleman will see that the view I am rather disposed to suggest to him is the right one after all, and that a Sub-section in the Clause will not really have the effect of making the husband, who is separated from his wife—because he would be assessed separately without any application—liable in his goods for his wife's debt. That is the other view I suggest to him. I shall be very glad to consider what the hon. and learned Gentleman said, but I assure him it was with that intention that the matter has been left as it is. We thought, as my hon. and learned Friend said just now, that this is a Clause which obviously proceeds on the assumption that you are dealing with a case of a husband and wife living together. If they each want a separate assessment, they must make an application, and if that is regarded as the substantial meaning of the Clause, none of these subsidiary matters would be thought to have other application. I can give the hon. and learned Gentleman the assurance that that is the view the Inland Revenue take. The present view of a married woman living separately from her husband is very largely a matter of practice. It is not easy to get it out of the actual words in an Act of Parliament. I am quite confident, if he will accept the assurance for what it is worth, that it is the intention to regard this Clause as confined to the husband and wife 555 who live together and who claim to be assessed separately. If that be so, I suggest to him that to deal with the matter hastily might upset the law with regard to husband and wife living separate.
§ Mr. RAWLINSON
I desire to thank the right hon. Gentleman for his courtesy. I was assuming that the right hon. Gentleman was right, and I was dealing with the much narrower point where husband and wife are living together and claim to be assessed separately under this Clause, but that during the progress of the financial year they become separated. I hope he will bear that in mind.
§ Question, "That the word 'husband' stand part of the Bill," put, and negatived.
§ The word "wife" there inserted in the Bill.
§ Sir J. SIMON
I beg to move, at the end of Sub-section (3), to add the words,Provided that no distraint shall be so made on the goods and chattels of the husband unless a written demand for payment shall first have been made on the husband or left at his usual place of residence and he shall have failed to pay the amount of tax payable by his wife within seven days of such demand.
§ Words, "for him," inserted in the proposed Amendment.
§ Mr. BOOTH
I desire to ask a question as to the last few words. The hon. and learned Member for West St. Pancras (Mr. Cassel) proposed they should be "within twenty-one days of such demand." I should prefer that, but as he accepts the Amendment as a considerable concession, I can only express my satisfaction with the agreement. Should it not be made clear that the seven days is seven days after such demand? How it is delivered, one does not know. Is it not possible that the demand note may be a week-end in the post? Is it clear that there are to be seven clear days after the demand is left?
§ Mr. J. HOPE
I should like to ask whether the Government cannot alter the seven days. They might accept a longer time. Seven days may easily pass without the husband knowing anything about it. I should prefer the twenty-one days as suggested by the hon. and learned Member for West St. Pancras. I do not want to make meticulous objections, but I do not see the point of the Inland Revenue, so long as they get the money in the end, in objecting to a longer term than seven days.
§ Sir J. SIMON
We must assume before one has to take so extreme a course as seizing the goods of a husband to pay the Income Tax, that there has been a pretty considerable degree of negotiation or application, or altercation between the Inland Revenue on the one side, and the subject on the other.
§ Sir J. SIMON
With the wife, if you please. When you get to that point, I do not know whether the hon. Gentleman will think it reasonable, but every additional day you give to people makes it more likely that when you do come to seize the goods they will have disappeared. It is quite right that you should not, as the hon. and learned Member for Kingston (Mr. Cave) said, put a business man to the indignity, and it may be, actual commercial inconvenience and social disturbance of having a bailiff put in his house to seize his furniture when, by some conceivable accident, he may not even have heard that his wife has refrained from paying her tax. Once you have seen that he has got a notice you cannot give him more than this time, or you are not giving the revenue proper security against cases which do arise. You have to consider not only the case of an honest citizen but also the case of a dishonest citizen in which to give a great lapse of time means that any possibility of recovering the tax disappears.
§ Mr. CHAMBERLAIN
I recognise the force of what the Attorney-General says, but I hope and believe that the Inland Revenue will exercise reasonable discretion in cases of this kind. I remember, when I was Chancellor of the Exchequer, a right hon. Gentleman, who was a respected Member on the other side of the House, but who is no longer with us, coming to me in fierce indignation, not because a bailiff had been put into his house, 557 but because minatory notices had been issued to him at his usual place of residence, when he in fact was taking what I have no doubt was a much needed holiday or cure abroad, and letters had not been forwarded. He was a well-known Radical Member, but his indignation could not have been greater if he had been the most austere stickler for the rights of property that any of us has known within this Assembly. I think he said that, after all, he was not the kind of person who was likely to disappear, that he had paid his Income Tax and discharged his obligations as a citizen regularly, and that it was offensive and insulting to assume at once that he was nefariously defaulting, when a little inquiry would have shown that he was taking a holiday abroad in the ordinary course. That was an incident which arose through the too great zeal and too little discretion of some subordinate officer of the Inland Revenue. When it was brought to my attention the Inland Revenue and myself did what we could to heal the outraged feelings of the right hon. Gentleman. I hope the Inland Revenue will understand that when they have powers of this kind, they have to exercise them with discretion, according to the circumstances of the case.
Proposed words, as amended, there inserted in the Bill.
§ Sir J. SIMON
I beg to move, in Subsection (4), to leave out the words:—and Section five of the Finance Act, 1897 (which relates to the exemption of the income of a married woman in certain cases), shall not have effect in a case where an application has been made under this Section.This Amendment is necessary. We have now redrafted the Clause so as to provide for the case of applications under Section 5 of the Finance Act, 1897. The Amendment is purely consequential.
§ Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.