§ 60. Mr. ARNOLDasked the Chancellor of the Exchequer whether he will state the estimated total cost of collection of the Income Tax on incomes below £250 and above £250, respectively, including in both cases all consequent expenses in connection with abatements; whether he will state approximately the estimated number of persons who are liable for Income Tax on incomes below £250 and above £250, respectively; and whether he will state the estimated revenue to be obtained from the Income Tax during the current year from incomes below £250 and above £250, respectively?
Mr. CHAMBERLAINThe machinery of assessment and collection of the Income Tax constitutes an organised whole, and I am advised that it is almost impossible to identify any part of the total cost with any particular class of taxpayer.
It is calculated that for the year 1918–19 the total cost of the collection and assessment of the Income Tax (and Super-tax) is approximately £3,000,000, including the cost of the services rendered by Departments other than the Inland Revenue. From such data as are available, it is roughly estimated that of this amount some £600,000 may be attributed to taxpayers in receipt of incomes under £250. This sum works out as 7½per cent, of the estimated amount paid last year by this class of taxpayer in Income Tax, which was roughly £8,000,000. As I informed the hon. Member on the 8th instant, it is anticipated that a like amount will be collected from the same class in the current financial year.
As regards the rest of the question, I would refer the hon. Member to the answer I gave to the hon. and gallant Member for West Ham on 13th instant, of which I am sending him a copy. The hon. Member will no doubt see that it would not be correct to infer that because it is estimated that taxpayers below £250 will pay £8,000,000 in the current year, taxpayers over £250 will pay £312,000,000 (the Income Tax estimate), less £8,000.000, namely, £304,000,000. This would leave out of account the tax borne by companies, corporations, etc., on undistributed profits, as well as tax paid by non-residents.
§ Mr. ARNOLDIs it not the fact that the cost of collecting this £8,000,000 revenue on incomes below £250 a year amounts to more than the cost of collection of any other similar amount of revenue?
Mr. CHAMBERLAINOf course, the collection of the tax in small amounts from people of small means is more costly than the collection of the tax in large amounts from people of large incomes, and if the whole of the Income Tax could be paid by one individual, of course the cost of collection would be reduced to nothing, but there is a difference between the 7½per cent, which is the nearest estimate my advisers can make, and the 70 per cent, which adorned the hon. Member's speech the other day.
§ Mr. ARNOLDMay I ask the right hon. Gentleman whether he is aware that the 199 70 per cent. was an official figure quoted in this House by one of his predecessors as given by the Inland Revenue authorities in certain cases?
Mr. CHAMBERLAINThe Inland. Revenue authorities are unable to trace any estimate of 70 per cent, ever made by them.
§ Mr. ARNOLDIs he aware that that estimate is given in the OFFICIAL RBPOET in November, 1914, on the authority of the late Chancellor of the Exchequer?
Mr. CHAMBERLAINOf course, I cannot explain what happened, but I think there must be a misprint in the Report. Whether 7 per cent, was mentioned and turned into 70 per cent, in the Report, or what happened I cannot say, but there is no foundation for it.