INCOME TAX. (Hansard, 6 June 1917)

§ 23 and 24. Mr. PETO

asked the Chancellor of the Exchequer (1) whether in computing total income for the purposes of ascertaining assessment to Super-tax and for the purposes of exemption, abatement, and reduced rate of Income Tax on earned or unearned income, the emoluments paid by companies and corporations free of Income Tax are required to be taken, and are in fact taken, according to the assessments made upon the individuals under Schedule E; whether such Schedule E assessments are not made upon the amounts returned for taxation upon Form 46, which amounts are not converted into gross income by the companies nor by the revenue officials; if so, whether the Government will consider the advisability of following the course adopted in the case of the 4 per cent. War Loan, 1929–1942, by treating all free-of-tax emoluments for the purposes of Super-tax and Income-tax as if the amount paid represented the net income 153 after deduction of Income Tax at the full normal rate, and further that there shall be no title to repayment of Income Tax in respect of any such emoluments paid free of Income Tax; (2) whether he is aware that the practice of paying emoluments free of Income Tax causes distinctions in income taxation as between individuals who would otherwise be in equal degree, and also deprives the revenue of Super-tax on the value of these gifts of Income Tax and further deprives the revenue of Income Tax thereon in different ways and in particular by transferring the additional taxation upon a lesser amount than the true amount from Schedule E to Schedule D, thereby spreading the collection of the further tax over three years and postponing it for one year or longer; and, if so, whether the Government will consider the advisability of forbidding the practice of all payments free of Income Tax for any purpose whatsoever?