NEW CLAUSE.—(Deposit of Sums for Payment of Excess Profits Duty.) (Hansard, 26 June 1916)

§ Mr. MONTAGU
We are anxious to collect sums which are due to us on account of Excess Profits Duty. Sometimes delay is entailed in determining the liability when it has already become obvious that thousands of pounds are due from the company or firm which is liable to be taxed. The firm wants some means of disposing 689 of these sums before the final adjustment of the tax. The suggestion in this Clause is that they should be allowed to pay in advance, before the liability is finally settled, and be entitled to interest for the sums so paid in advance. The effect is just the same as if the companies or firms concerned took out Treasury Bills, except that the Treasury Bills run for fixed periods and the tax may become payable at the end of a broken period.

§ Mr. PETO
I would like one word of explanation from the right hon. Gentleman. I wrote to the Chancellor of the Exchequer on the subject of accepting Exchequer Bonds and the like in payment of Excess Profits Duty, and understood that the Treasury had no power without legislation to accept Government securities in payment of Excess Profits Duty. Surely what we are now enacting is a little complicated. We have first this Clause in reference to Excess Profits Duty, and then there is a second Clause enabling Exchequer Bonds to be deposited in satisfaction of Death Duties. The liability to Excess Profits Duty and the levy under the Munitions Act are not a certain amount. We are told that nothing is certain in this world but death, and certainly if the Clause is good enough for the Death Duties it ought to be right in the case of excess profits and the levy under the Munitions Act, in the form that at any time during the year when these duties accrue Government securities will be accepted. They would have them in liquidation of the debt, if it were so stated here. I cannot quite understand the Chancellor of the Exchequer's answer that the Government cannot accept Government securities for settlement of Income Tax and Excess Profits Duty without legislation. He knew he was going to propose legislation to the House, and why could he not have amalgamated those two Clauses into one, and provide that either in the case of Death Duties or Excess Profits Duty Government securities would be accepted?

§ Mr. POLLOCK
I do not believe the last two lines of the Clause are really effective for the purpose of carrying out the intention of the Chancellor of the Exchequer. They are rather cryptic: In calculating the amount to be so applied in payment of duty, interest shall be allowed at such rate as may be determined by the Treasury. 690 What you really mean is that when you ascertain the amount due you come to consider payment of the interest. I believe that if this matter were left over until Report the Chancellor of the Exchequer might insert some words such as "calculating the value of the amount." As the matter stands, it may be that the deposit is larger than the amount of the debt that is to be paid, and, so far as the sum that has been deposited before the date when the debt was actually due is concerned, you would want to allow interest, or you would give interest on the total deposit. As the words stand I do not think they will effect your real purpose, and I suggest the Chancellor of the Exchequer should take the matter into consideration before Report.

§ Mr. McKENNA
I admit that the words are very difficult to follow, but if the hon. and learned Member will read them as I do it would be in this way: "In calculating the amount to be so applied"; then you have to go back two lines to the words, "and sums so deposited shall be applied in payment of any such duty"; and then you go back to the first line of the Clause, "Any person may deposit," etc. In calculating what the person has deposited you do not take the actual amount deposited, but the amount of accrued interest, and that amount becomes payable. If you get a deposit which is greater than the amount to be paid, the balance is returned. If these words are not clear, I do not know any form of words by which it could be put more shortly.

§ Mr. POLLOCK
I should have thought that the English language was capable of dealing with this in a proper manner, and that the Chancellor of the Exchequer, with his admirable knowledge of Chinese puzzles, would have been able to find a form of words. If English fails, then I suppose we must accept it, but I should have thought that, with a little greater care, the words might have been made plainer to those who desire to understand them. They are the most perfect Income Tax sort of words because they are quite unintelligible to the ordinary reader. On that ground they fulfil the historic tradition that belongs to all Income Tax Acts.