| DUTIES ON MECHANICALLY PROPELLED VEHICLES. | ||
| Description of Vehicle. | Rate of Duty. | |
| 1. Cycles (including motor scooters) not exceeding 8 cwt. in weight unladen:— | ||
| Bicycles— | ||
| Not exceeding 200 lbs. in weight unladen | £1 | 10s. |
| Exceeding 200 lbs. in weight unladen | £3 | |
| Bicycles if used for drawing a trailer or side-car, and tricycles | £4 | |
| 2. Vehicles not exceeding 5 cwt. in weight unladen adapted and used for invalids | 5s. |
§ 4. Vehicles of the following descriptions used in the course of trade otherwise than for the conveyance of goods and in agriculture (that is to say):—
| Locomotive ploughing engines, tractors, agricultural tractors, and other agricultural engines, not being engines or tractors used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements, or supplies of fuel or water | 5s. |
| Road locomotives and agricultural engines, other than such engines in respect of which a duty of 5s. is chargeable or which are used for haulage solely in connection with agriculture— | |
| Not exceeding 8 tons in weight unladen | £25 |
| Exceeding 8 tons but not exceeding 12 tons in weight unladen Exceeding 12 tons in weight unladen | £30 |
| Tractors, agricultural tractors, and agricultural engines, other than such tractors or engines in respect of which a duty of 5s. is chargeable, used for haulage solely in connection with agriculture— | |
| Not exceeding 5 tons in weight unladen | £6 |
| Exceeding 5 tons in weight unladen | £10 |
| Tractors of any other description | £21 |
| 5. Vehicles (including tricycles weighing more than 8 cwt. unladen) constructed or adapted for use and used solely for the conveyance of goods in the course of trade— | |
| Not exceeding 12 cwt. in weight unladen | £10 |
| Exceeding 12 cwt. but not exceeding 1 ton in weight unladen | £16 |
| Exceeding 1 ton but not exceeding 2 tons in weight unladen | £21 |
| Exceeding 2 tons but not exceeding 3 tons in weight unladen | £25 |
| Exceeding 3 tons but not exceeding 4 tons in weight unladen | £28 |
| Exceeding 4 tons in weight unladen | £30 |
| With an additional duty, in any case if used for drawing a trailer, of | £2 |
| 6. Any vehicles other than those charged with duty under the foregoing provisions of this Schedule:— | |
| Not exceeding 6 horse-power or electrically propelled | £6 |
| Exceeding 6 horse-power | £1 for each unit or part of a unit of horse-power. |
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)I beg to move, in paragraph 1, after the word "scooters", to insert the words "and cycles with an attachment for propelling the same by mechanical power".
The question has been raised whether the addition of an attachment for propelling cycles by mechanical power will remove this class of vehicle from the bicycle which is subject to a lower rate of taxation, and include it among the tricycle, which is subject to a slightly higher rate of taxation. In order to secure that they are treated as bicycles and not as tricycles, I move this Amendment.
§ Captain ELLIOTIs there any dictionary or other standard work in which this word "scooter" is to be found? It is a very important thing. It is a new word in an Act of Parliament.
§ Mr. A. M. SAMUELI think it is rather a shame that we should have a word like this imported into the English language. We ought to make some effort to find a standard word to preserve the purity of our English. This is a word which ought not to be allowed to stand.
§ Lieut.-Commander KENWORTHYI think the words chosen by the Parliamentary Secretary to the Ministry of Transport are extremely misleading, and I have known something about bicycles for a good many years
§ Amendment agreed to.
§ Lieut.-Commander KENWORTHYI beg to move, in paragraph 1, to leave out "£1 10s." and to insert instead thereof "15s."
This tax of 30s. on motor-bicycles is very heavy. After all, the motor-bicycle is not a rich man's means of conveyance. They are used generally by young mechanics and people of that sort, and I think the Amendment is very much needed. I do not know what will be brought in by this increased duty, but I do not think the Exchequer would lose tremendously by this concession, which I hope the Chancellor of the Exchequer will make to a class of men, most of whom, I think, have served in the Army and have now been discharged, and a great many of 1601 whom use their motor-bicycles partly in their business.
§ Mr. A. M. SAMUELI should like to appeal on behalf of another class, to whom my hon. and gallant Friend has not referred—I mean the wounded and paralysed, who use attachments on bath chairs. I hope the Chancellor of the Exchequer will make some exception in their case.
§ Mr. NEALThis Amendment, which stands on the Paper in the name of another hon. and gallant Member (Colonel Newman), is followed by two others in a similar class, to reduce the Schedule rates by one-half. I would point out that these fees include registration fees, and the fact has to be borne in mind that motor-cyclists previously paid on their petrol The history of the particular figure is this: When it was a question of arranging what should be the proper duty, the Auto-Cycle Union and the Motor and Motor Cycle Traders and Manufacturers' Union were consulted as to what they thought would be an appropriate duty, and they recommended, with reference to the item which is now under discussion, the figure which has been inserted, namely, 30s. In reference to the other two, we have adopted their recommendations with a very trivial exception—I think 5s. in one case. This, therefore, has been approved by those immediately concerned, both the users and makers of motor cycles.
§ Lieut. - Commander KENWORTHYI beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Lieut. - Commander KENWORTHYI beg to move, in paragraph 1, to leave out "£4" ["Bicycles if used for drawing a trailer or side-car and tricycles, £4"] and to insert instead thereof "£2."
A person who has a trailer is no better oft than a person with a motor-cycle without a trailer. It means that he is probably married, and therefore a good deal worse of. This is a special tax on married men who generally use their trailers to take their wives and children out. The whole trend of legislation has been to give relief to men with families, but in this case you are putting an extra tax on them.
Dr. MURRAYI desire to support the Amendment. I think a motor cycle, without a trailer or side-car, is the most 1602 selfish thing in existence. In order to encourage people to have a companion on their country rambles, I think the Amendment should be accepted. When I see a man going along alone in one of the country lanes, I invariably think he could or should spend a pound or two or more on a side-car or trailer. It would give a lot of pleasure to someone else. "You would not," is what occurs to me, "leave your wife as you are doing, at any rate you will double the pleasure of someone." In order to promote and increase pleasure, and get a larger number of people into the country lanes to get the fresh air, and away from London, I support this. No doubt the hon. Gentleman opposite will be in sympathy with these ideas and accept the Amendment.
§ Mr. NEALThe same observations that I made before are applicable to this Amendment as to our acceptance of the suggestions of the trade.
§ Amendment negatived.
§ Mr. NEALI beg to move, in paragraph 2, after the word "Vehicles" ["Vehicles not exceeding 5 cwt."], to insert the words "including cycles with an attachment for propelling the same by mechanical power."
Earlier the hon. Member for Govan (Mr. N. Maclean) raised precisely the same question as mentioned by my hon. Friend the right hon. Member for Norwich (Mr. G. Roberts). The Amendment is to make the position quite clear.
§ Amendment agreed to.
§ Mr. NEALI beg to move, in paragraph 3, after the word "carriages" ["Vehicles being hackney carriages"], to insert the words "as defined in Section four of the Customs and Inland Revenue Act, 1888."
There is a variety of definitions of carriages, and of hackney carriages. In order to make it quite clear, we propose the definition which is the one given in the Act quoted.
§ Amendment agreed to.
§ Mr. NEALI beg to move, in paragraph 3, to leave out "5" ["seating not more than 5"], and to insert instead thereof "6."
This deals with vehicles of the hackney carriage class, and it is provided that 1603 vehicles seating more than 5 persons shall pay the duty set out. The hon. Member for Nottingham (Mr. Atkey) has an Amendment down to insert "7," but the proposal I am making will meet his point, because it is not made clear in the Schedule whether the number includes the driver or not. By a later Amendment w make it clear that the driver is not included, and the hackney carriage may carry 7 persons including the driver.
§ Amendment agreed to.
§ Further Amendments made: In paragraph 3, leave out "5" ["seating more than 5"], and insert "6".
§ At the end insert the words, "In this paragraph the number of persons mentioned does not include the driver of the vehicle."
§ In paragraph 4, after the word "used" ["Vehicles of the following descriptions used"], insert the word "solely."
§ Leave out the words "otherwise than for the conveyance of goods and" and insert instead thereof the word "or."—[Mr. Neal.]
§ Mr. NEALI beg to move, in paragraph 4 after the word "water" ["supplies of fuel or water"], to insert the words "required for the purposes of the vehicle or for agricultural purposes."
§ Lieut.-Commander KENWORTHYIt seems extraordinary to propose this. Why should these machines pay more than other machinery? It is part of the policy of taxing every single thing in the country; and I wish to enter a short protest.
§ Lieut. - Commander KENWORTHYYes, but why?
§ Amendment agreed to.
§ Mr. NEALI beg to move, in paragraph 5, after the word "trade" ["in the course of trade"], to insert the words "being vehicles which are electrically propelled, and which do not exceed 25 cwt. in weight unladen—26."
The object is to reduce the scheduled duty of £10 to a lower duty of £6, and this is to redeem a promise made by the Minister of Transport in the Debate on the Budget Resolution, when his attention was called to the fact that there 1604 has grown up a smaller vehicle, such as the little electrical carriages which run about railway platforms, on which a duty of £10 is excessive. It is, therefore, proposed to reduce it to £6.
§ Amendment agreed to.
§ Mr. NEALI beg to move, in paragraph 6, to leave out the words "In the case of a vehicle the engines of which are proved," and to insert instead thereof the words, "If any person proves."
This and several subsequent Amendments stand together. If hon. Members look at this paragraph, they will see there is an allowance of 25 per cent. of the total due in respect of vehicles the engines of which are proved to the satisfaction of the authority charged with levying the duty to have been constructed before the 1st January, 1913. I propose to leave out the words "In the case of a vehicle the engines of which are proved," and then will follow other Amendments providing for the rebate on the production of a certificate that the full duty has been paid.
The CHAIRMANThe Department appears to have been very slack. I presume the hon. Gentleman will not move the next Amendment to substitute "vehicles" for "a vehicle," seeing that that contradicts the one he is now moving. The two cannot stand together. I must take the first one, and the other must be done on Report.
§ Amendment agreed to.
§ 11.0 P.M.
§ Further Amendment made: In paragraph 6, leave out the words "to have been" ["to have been constructed before the first day of January"], and insert instead thereof the words, "that he has paid in respect of any vehicle the duty chargeable under this paragraph, and that the engine of the vehicle was".—[Mr. Neal.]
§ Mr. NEALI beg to move, in paragraph 6, to leave out the words, "a rebate shall be allowed from the duty chargeable under this paragraph equal to twenty-five per cent. of the amount thereof," and to insert instead thereof the words, " he shall be entitled to repayment of twenty-five per cent. of the duty paid."
§ Question, "That the words proposed to be left out stand part of the Schedule," put, and negatived.
1605§ Question proposed, "That the words he shall be entitled to repayment of twenty-five per cent. of the duty paid be there inserted."
§ Colonel GRETTONBefore these words be inserted, which ostensibly give a rebate of 25 per cent. to the taxpayer, I should like to hear some explanation as to how the taxpayer is to claim this rebate. In what way can he prove the date of the engine? Most engines are stamped with the maker's number, but in many cases the makers have ceased to make the engines. Has the Ministry of Transport any process by which this rebate may really become effective, and by which the taxpayer, without an unduly laborious process, may be able to obtain the rebate?
§ Mr. NEALThat has been considered. There are a variety of ways in which the proof may be given. It may be that a particular motor has been continuously registered from January, 1913, and in that case the proof would be conclusive. In some cases the engines themselves bear dates, and in such cases there would be no difficulty. In other cases the taxpayer must adopt the most appropriate means of proving the date.
§ Colonel GRETTONThat is just my point. What is the most appropriate means? It is no use putting up a rebate which is really delusive and cannot be obtained. As I expected, my hon. Friend, when he comes to the point, is quite vague and does not suggest how this proof may be obtained. If the offer is inserted in the Bill, it should be a genuine, substantial offer, and it should be certain that the taxpayer will really be able to obtain the rebate.
§ Motion made, and Question proposed, "That the Schedule, as amended, be Second Schedule of the Bill."
§ Mr. HOGGEI think that, before we agree to the Schedule, in view of the strictures which you, Mr. Whitley, have passed on the Ministry of Transport and their Amendments, the attention of the Chancellor of the Exchequer ought to be drawn to what you have said, and we ought to understand what it is that we have really agreed to. I think that, before the Schedule is definitely agreed to by the Committee, the Parliamentary Secretary to the Ministry of Transport should 1606 now read out to us exactly what the change means, so that we can appreciate what has been the outcome of the efforts of himself and his Chief and the corresponding Directors-General.
The CHAIRMANI think the hon. Member is, perhaps, taking the matter a little too seriously. What the Ministry have done has been simply to put down a number of Amendments which are not all consistent with one another.
§ Captain ELLIOTI should like again to call the attention of the Government to the fact that there is a word in this Bill of which they cannot give any definition. This is not simply a joke, although I see right hon. Gentlemen on the Front Bench scowling most disapprovingly. There has been too much of this. The Government put the word "profiteering" into an Act of Parliament without ever defining what "profiteering" was. Now they attempt to put in the word "scooters". It is one of the most dangerous things that can be imagined. It is all very well for them to change our laws and constitution, but to change the grammar of England is going rather far. There is nothing more important than understanding the very bones of the language. What are we to do if some future Government, some less educated Government if that were possible, begins to put in the ordinary slang of the streets? After all there is no great gap between that and this word. It may be that Governments in the past have been in the habit of inserting these disgusting neologisms in Acts of Parliament, but I certainly do not think so. I beg of older Members to give us their opinion on this point, because the Government that began last year with "profiteer" and goes on this year with "scooter" may go on next year to "jazz," or any such thing. If we cannot get any definition, I ask you, Sir, for a ruling, not only as Chairman of the Committee, but as Chairman of Ways and Means, your name appearing on the back of the Bill. The right hon. Gentleman (Mr. Asquith) in a very brilliant speech yesterday drew attention to this outburst of colloquialism in the Civil Service of the country, and I can only suggest the evil communication of the Minister of Transport, whose name also appears on the back of the Bill, has corrupted his manners in this case, and the colloquial habits of every 1607 day are penetrating farther and farther into the arena of Government. Before the Schedule goes through I beg some Member of the Government to give us a definition of what he means by the word "scooter", and if some of them can I call for the presence of the Minister of Education. When they bring in these disgusting new forms of American slang and put them into Acts of Parliament it is worth while at least to call the attention of the House to the degradation of English, which is not only being connived at, but actively pressed forward by the Treasury Bench. Is it not possible for the Government to give us a definition of the word "scooter".
Dr. MURRAYI wish to reinforce the leader of the neo-Bolshevists on the other side of the House. I do not know what language the word "scooter" belongs to. It seems to me to be very bad English.
§ Major NALLI want to call attention to a point of substance. It appears from what the Parliamentary Secretary has said that the Ministry made rather a mistake in the Schedule as, it now stands. He said that, as the Schedule stood, the tax of £10 would be charged on small electrically-propelled trolleys, and he moved to fix the tax at £6. For the most part these trolleys never come upon any highway; they are used in railway stations, goods yards, and warehouses. Why is it proposed that these small trolleys, which make no use of a public highway, should pay a tax which is designed only for vehicles that use the highway. Surely the whole object of this schedule is to enforce payment for the use of the public highway, and yet the Ministry of Transport is now inflicting this most unnecessary tax on small vehicles, which make no use of the highway. This is a charge on railways that appears to be most unreasonable and a charge upon everybody who uses these small trolleys in factories and for other purposes. A great mistake has been made, and I hope it will be put right on Report.
§ Lieut.-Commander KENWORTHYI reinforce what the hon. Member has said. I am very much in favour of encouraging labour-saving appliances in every possible way. These electrical luggage carriers are great labour savers 1608 and a great convenience in handling traffic, and yet it is proposed to put a tax of £6 upon them, even if they are used inside warehouses. A tax is also put upon motor char-a-bancs, which are transforming the rural life in out-of-the-way districts. I do not think this very high tax is justified. There is also a ridiculous proposition to tax ploughs and other agricultural appliances. This will bring in no revenue. It is really only a registration fee, but it will entail an extra staff going round to inspect these agricultural implements and to call to see the licence. It means that we are getting money in one direction, and taxpayers will have to find the money in another.
§ Major GLYNI should like to know what is meant by the words "and such other districts as the Minister of Transport may fix." There is a great distinction drawn between mechanical vehicles in the Metropolitan Police area and those in other districts. Those Members who represent rural constituencies realise how heavy is the rate that is now imposed for road maintenance in those districts. It is very hard on rural districts where these large char-a-bancs tear up the roads. They cannot afford to pay for the maintenance of the roads unless they get real assistance from those persons who derived benefit from the beautiful country through which those large vehicles ran.
§ Mr. A. M. SAMUELThere is a danger in the wording of the Amendment as to electrically-propelled vehicles. In many of our factories we have lifts which are electrically propelled. Some over-zealous official might give a lot of trouble by interpreting the words as covering factory lifts, and I would press the Under-Secretary to say whether the words include a factory lift or not.
§ Mr. NEALThe contribution made to the local authorities in no sense depends upon the amount collected in the district. It is intended that half the cost of the maintenance of the main roads shall be paid to the local authority who are responsible for those roads and one-fourth of the cost of the second-class roads. In reply to the hon. Member (Mr. Samuel), it is plain that a lift in a factory would not be a mechanically-propelled vehicle within the meaning of the Act.
| THIRD SCHEDULE. | |
| CONSEQUENTIAL AND MINOR AMENDMENTS OF INCOME TAX ACT, 1918. | |
| Enactments to be amended. | Nature of Amendment. |
| Section 4 … … … | The words "two thousand pounds" shall be substituted for the words "two thousand five hundred pounds." |
| Section 5 … … … | For the words "estimated for the purposes of exemption "or abatement under this Act" there shall be substituted the words "required to be estimated in a return made in "connection with any claim for a deduction from assessable income." |
| Section 16 … … … | A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement or relief under the preceding provisions of Part III. of the Income Tax Act, 1918. |
| Section 17 … … … | The words "allowance or deduction" shall be substituted for the words "exemption, abatement." |
| Section 18 … … … | The words "the Income Tax Acts" shall be substituted for the words "any exemption, abatement, or relief under this Act." |
| Section 19 … … … | A reference to any claim for an allowance or deduction shall be substituted for the reference to the claim under the preceding provisions of Part III. of the Income Tax Act, 1918. |
| Section 20 … … … | A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, or relief under the preceding provisions of Part III. of the Income Tax Act, 1918. |
| Section 22 … … … | A reference to any allowance or deduction shall be substituted for the references to any exemption, abatement, or relief which is dependent wholly or partially on total annual income. |
| Section 23 … … … | The words "allowance or deduction" shall be substituted for the words exemption, abatement, or relief." |
| Section 27 … … … | A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, or relief under the preceding provisions of Part III. of the Income Tax Act, 1918. |
| Section 28 … … … | A reference to claims for any allowance or deduction shall be substituted for the reference to claims under the preceding provisions of Part III. of the Income Tax Act, 1918. |
| Section 29 … … … | The words "allowance or deduction" shall be substituted for "exemption, abatement." |
| Section 30 … … … | A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, or relief there in before described in the Income Tax Act, 1918. |
| Section 32 … … … | In Sub-section (2) the word "annual" shall be omitted. |
| In paragraph (a) of Sub-section (3) the word "chargeable" shall be omitted. | |
| Paragraph (b) of Sub-section (3) shall be omitted. | |
| Sub-section (4) shall be omitted. | |
| Section 39 … … … | The following shall be substituted for proviso (i) to paragraph (b) of Sub-section (3). |
| "Any such interest shall be chargeable under Case III. of Schedule D." | |
| Section 105 … … … | In paragraph (b) of Sub-section (1) the words "one hundred and fifty pounds "shall be substituted for the words "the" sum for the time being fixed as the limit for total "exemption from tax." |
| Fifth Schedule … … | In paragraph XVII. a reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, relief, dependent on total income. |
| NOTE.—In this Schedule the expression "allowance or deduction" means any allowance, deduction, o reduction of rate made or allowed under sections fifteen to twenty-two, both inclusive, of this Act. |
§ Amendments made: In paragraph beginning "Section 32," after the word "omitted" ["word 'chargeable' shall be omitted"], insert the words
§ "and the words the provisos of the Income
| Section 236 … … … | The words "allowance or deduction" shall be substituted for the words "exemption, abatement." |
| First Schedule … … | In paragraph (5) of Rule 8 of No. V. in Schedule A the words "the Income Tax Acts which relate to claims for any allowance or deduction" shall be substituted for the words "this Act which relates to claims for exemption, abatement, or relief." |
§ In paragraph beginning "Fifth Schedule," after the word "abatement," insert the word "or."—[Mr. Chamberlain.]
§ Motion made, and Question proposed, "That the schedule, as amended, be the Third Schedule of the Bill."
| FOURTH SCHEDULE. | ||
| ENACTMENTS REPEALED. | ||
| Session and Chapter. | Short Title. | Extent of Repeal. |
| 59 & 60 Vict. c. 36. | The Locomotives on Highways Act, 1896. | Section eight, as from the 1st day of January, 1921. |
| 62 & 63 Vict. c. 9. | The Finance Act, 1899. | Section two. |
| 10 Edw. 7. c. 8 | The Finance (1909–10) Act, 1910. | Sections one of three; Sub-section (1) of Section four; in Sub-section (2) of Section four the words "for the purpose "of the assessment of duty thereon," and the words "and to pay interest at the "rate of five per cent. per annum on any "duty ultimately payable by him as from "the date on which the instrument has "been executed"; in Sub-section (3) of Section four the words from "(a) either "to "assessment or," and the words from "which in their opinion" to the end of the Sub-section; Sub-section (4) of Section four; in Sub-section (5) of Section four the words from "and with respect" to the end of the Sub-section; Sub-section (6) of Section four and in Sub-section (7) of Section four the words from "but the "Commissioners" to the end of the Subsection; Sections five to nineteen; in Subsection (4) of Section twenty-one the words from "or where" to "that duty," the words "or increment value duty as the "case may be," the words "or reduc"tion" and the words "or reduction as "the case may be"; Sections twenty-two, twenty-three, twenty-five to twenty-nine; Sub-section (4) of Section thirty-one; Section thirty-two; in Sub-section (1) of Section thirty-five the words from and "any increment" to the end of the Sub section; Sections thirty-six to forty; in Section forty-one the definitions of "rent-"charge," "rent," "incumbrance," "fixed |
§ Tax Acts' shall be substituted for the words 'this Act'."
§ At the end of paragraph beginning "Section 105" insert the words
§ Sir D. MACLEANIt may alleviate the anxiety of the hon. and gallant Gentleman, if I say that I have looked up the word " scooter," and find that it is quite a good English word.
| Session and Chapter. | Short Title. | Extent of Repeal. |
| "charge," "owner" and "agriculture" in paragraph (1) of Section forty-two the definition of "rent," "rent-charge," "owner," "feeholder," and "incumbrance"; paragraph (3) of Section forty-two to "accordingly"; Section sixty-two; in Section seventy-three the words from "Provided that" to the end of the Section; and as from the 1st day of January, 1921, Sections eighty-four to eighty-six and the Fifth Schedule. | ||
| 1 & 2 Geo. 5. c. 2. | The Revenue Act, 1911. | Sections one to six. |
| 1 & 2 Geo. 5. c. 48. | The Finance Act, 1911. | Sections eleven and twelve as from 1st day of January, 1921. |
| 2 & 3 Geo. 5. c. 8. | The Finance Act, 1912. | Section ten. |
| 5 & 6 Geo. 5. c. 89. | The Finance (No.2) Act, 1915. | Sub-section (5) of Section twenty-one; Section forty-nine; and as from 1st day of January, 1921, Sections ten and fourteen. |
| 6 & 7 Geo. 5. c. 24. | The Finance Act, 1916. | Sections thirteen and fourteen as from 1st day of January, 1921. |
| 7 & 8 Geo. 5. c. 31. | The Finance Act, 1917. | Section nine as from the 1st day of January, 1921. |
| 8 & 9 Geo. 5. c. 15. | The Finance Act, 1918. | Sections eighteen to twenty. |
| 8 & 9 Geo. 5. c. 40. | The Income Tax Act, 1918. | Sections nine to thirteen; Sub-sections (1) and (2) of Section fourteen; Sections fifteen, twenty-one, twenty-four, twenty-six, thirty-one, forty-two to forty-four, fifty, fifty-two, and fifty-five. |
| 9 & 10 Geo. 5. c. 32. | The Finance Act, 1919 | Sections three to five, eleven, twenty, twenty-one, twenty-three, twenty-seven; and the First Schedule. |
§ Amendments made: In paragraph beginning "10 Edw. 7 c. 8," leave out the words "from 'Provided that' to the end of the Section", and insert instead thereof the words "the conveyance or transfer of any stock or marketable security, as defined by Section one hundred and twenty-two of that Act or to."
§
Leave out the words "and as from the 1st day of January, 1921, Sections eighty-four to eighty-six, and the Fifth Schedule," and insert instead thereof the words
as from the 1st day of January, 1921, Section eighty-four; as from the 1st day of July, 1921, Section eighty-five; as from the 1st day of January, 1921, Section eighty-six; and as from the 1st day of July, 1921, the Fifth Schedule.
§ In paragraph beginning "1 & 2 Geo. 5, c. 48," leave out the words "Sections eleven and twelve as from 1st day of January, 1921," and insert instead thereof the words "as from the 1st day of January, 1921, Section eleven; and as from the 1st day of July, 1921, Section twelve."—[Mr. Chamberlain.]
1614Mr. CHAMBERLAINI beg to move, in the paragraph beginning" 5 & 6 Geo. 5, c. 89," to leave out the words "and as, from 1st day of January, 1921, Sections ten and fourteen," and to insert instead thereof the words, "as front the 1st day of January, 1921, Sub-sections (1) and (2) of Section ten; and as from the first day of July, 1921, Sub-section (3) of Section ten and Section fourteen."
§ Sir F. BANBURYWe are going on at an enormous rate. I venture to say that not a single hon. Member understands this Schedule, except the Government, and not all of them. The Schedule begins about the middle of page 41 and it goes on very nearly to the end of page 42. What on earth it all means nobody knows. We have all these Amendments proposed without a word of explanation of what we are doing. The Committee have been very patient, and I really think we ought to have some explanation. I do not think we ought to have had an Amendment like this put down at all.
§ Captain W. BENNWe are going to move to omit the Clause which repeals the Land Duties. It appears to me that parts of this Schedule refer to the Land Duties. I do not want to object to the Chancellor of the Exchequer's Amendment as long as it is understood by the Chair that it will not prevent us debating fully the repeal of the Land Duties.
The CHAIRMANMost certainly. I will take care of that. I will not allow anything passed in the Schedule to prejudge that.
§ Amendment agreed to.
§ Mr. HOLMESI beg to move, in the paragraph beginning "8 & 9 Geo. 5, c. 40," to leave out the words "to forty-four" ["thirty-one, forty-two to forty-four, fifty, fifty-two"].
It is unfortunate that at this late hour we should come to a matter which, though in itself it may look very innocuous, affects the interests of every Income Tax payer in the country. The Schedule mentions certain Sections of the Income Tax Act, 1918, to be repealed. Among them are Sections 43 and 44, two of the most important Sections which protect Income Tax payers against unduly high assessments.
Mr. CHAMBERLAINWill the hon. Gentleman allow me to explain? He was good enough to consult me a moment ago. He wants to preserve in being certain reliefs. The Amendment will have no such effect. The reliefs require to be renewed by statutory enactment each year. We have not renewed them this year. All you would leave would be an obsolete phrase on the Statute. The whole object of this repeal is to clear the Statute Book of something which has become obsolete.
§ Mr. HOLMESI am aware of that, because I have had advice on the subject, and it was to the effect that if the Chancellor of the Exchequer or the Committee accepted this to-night we could on Report add to the Bill the Clause to which the Chancellor of the Exchequer has referred. We can settle the question one way or the other now, and then deal with it on Report if the Committee approve of this Amendment. Clause 43 enacts that an Income Tax payer, whether company or 1616 firms, or private individual or salaried man, is assessed upon three years' average ending before the commencement of the year of assessment. For the current year of 1920–21 the company which makes up its books to 31st December last year would be assessed on the average of the years 1917, 1918 and 1919, but the taxpayer has the right at the end of the year of assessment to bring in the current year and, instead of the three years I have mentioned, to be assessed on the average of the years 1918–19–20, if the profit for the year of assessment does not exceed the three years' average on the new basis. This right was dropped for a short time, but was revived and continued up to the present time. The Chancellor has now taken away what is a most important right for every Income Tax payer. Section 44 is still more important. It applies only to individuals. If an individual can prove that his actual income in any year is ten per cent. less than the income on which he has been assessed on the three years' average, he can claim to be assessed on the actual income and to be repaid whatever sum he has overpaid on the original estimate. Without a word of explanation in the Budget Speech of the Chancellor, one of the most important rights of the Income Tax payer is taken away at the end of the Schedule and by not putting in the Clause. I appeal to the Committee that they should preserve the right of the individual and the business man to continue this privilege.
§ Sir F. BANBURYI gathered from the Chancellor that these Clauses were obsolete. I do not think that Clause 43 is yet obsolete, though it may be in a year or two. What is the history of Clause 44? Somewhere about the years 1907–8 the right hon. Gentleman the Member for Paisley (Mr. Asquith), being then Chancellor of the Exchequer, moved to abolish the right which every Income Tax payer had had since, I think, the inception of the Income Tax Act, that if at the end of the year in which he had returned his income as being a certain sum he could prove to the satisfaction of the Commissioners that he had over-estimated that income, and that it was less than the return earlier in the year should be put right, he had the right to have that deficiency exempted from Income Tax. 1617 Income Tax is a tax on income, and if you have not got that income the Government have no right to tax you on what you have not got. When the right hon. Gentleman the Member for Paisley, as Chancellor of the Exchequer, moved to repeal that right, I protested that it was against the spirit of the Income Tax Acts, but his only excuse was that up to then the majority of Income Tax payers were not aware that that Clause was in existence, and that it was causing some diminution off income to the Government. A lamer excuse I never heard, but at that time the party with which I had the honour to be connected was in a very small minority, and we got no satisfaction. After that, nearly every year I moved to reinstate that Clause, and finally, in about 1914 or 1915, I moved the Clause, and when, I think, Mr. McKenna was Chancellor of the Exchequer, he accepted it, with this modification, that where a person proved that in any given year his income was 10 per cent. lower than that estimated he might have that difference returned to him. I do not think that was just, because even then, if the income was 10 per cent. lower, the Chancellor reserved to himself the right to charge Income Tax upon a sum which had never been received.
Now the Chancellor of the Exchequer desires to repeal the whole thing again and to go back to the bad precedent which was instituted by the right hon. Member for Paisley, with the result that where a man finds that on the three years' average he has returned his income at £1,000 and, owing to bad trade, he has actually received in the year £200, still he has to pay tax on £1,000. That was very wrong when the Income Tax was 6d. or 1s., but how much more wrong is it when the tax is 5s. or Os.? I do not think the authorities, in their desire to extract the last farthing from the taxpayer, can have realised the act of injustice which they are going to inflict if this Clause is repealed, and I venture to say that, considering the great facilities which the Committee has given to the Government to-day, when they are going to do an important act like this, we ought either to be told the Government will accept the Amendment or that we should adjourn in order that the whole of the Committee may really know what is being done.
Mr. CHAMBERLAINI think both the hon. Members are conducting the Debate under some misapprehension of the actual facts. There are two Sections concerned. One is 43, which is a revival of an old practice of the Income Tax which had been abandoned. It was revived during the War as a special War measure. Section 45 of the Income Tax Act of 1818 reproduces Section 13 of the Act of 1914, which was enacted in the early days of the War to meet cases of exceptional hardship. That provision was itself a revival of Section 133 of the Income Tax Act of 1842 and of a Section in the Revenue Act of 1855. The whole Section came under review by a Departmental Committee on Income Tax appointed by me when I was Chancellor of the Exchequer before, and presided over by the late Lord Ritchie in 1905. That Committee, in their Report, pointed out that the operation of the Section was unfair to the revenue, since it enabled the taxpayer to obtain relief when profits were low without giving any corresponding power to the Crown to re-open the issue when, profits were high. As a result, the sections were then repealed, and they were never renewed until 1914 and then only as a special war provision. Section 44 of the Act of 1918 reproduces Section 39 of the Act of 1918, which was the time when Mr. McKenna accepted the Amendment to which my right hon. Friend (Sir F. Banbury) referred. It does not provide for a return of Income Tax paid on incomes never received. It provides that where a man's actual income for the year is less than the sum at which he is assessed on the three years' average he may abandon the three years' average and have the benefit of the lower rate of that year. That, again, was introduced purely as a war concession to meet the special hardships that arose in consequence of the outbreak of the War. It was never intended that these or other special war reliefs should be continued beyond the period of the War. If the hon. Gentleman presses the Amendment, I will leave it, but it has no effect. They are words without effect. If he tries to render them effective by a Clause on Report, I must say that I shall not be able to accept that Clause.
§ Mr. HOLMESThe Chancellor of the Exchequer is trying to ride on two horses. His argument, in his Budget 1619 speech with regard to the continuance of the Excess Profits Duty, was that the War was still proceeding and that we were still under war conditions, but, with regard to Income Tax, he says that the War is over and that he cannot any longer continue these concessions which were intended for people who were suffering during the War. His argument with regard to the Excess Profits Duty, however, applies equally to the Income Tax. If a man this year suffers a diminution in income owing to a fall in prices, it is just as much due to the War as if another man makes greater profits owing to a shortage of goods and increased prices. There is no ground for withdrawing this because the War is over. That is no sound argument at all. It is perfectly true that Section 43 has a provision in it that if a person
has suffered a diminution of profits or gains due to circumstances attributable directly or indirectly to the present War.Section 44 does not mention "the present War". There is nothing whatever with regard to the War in the original 1916 Act. This was put back as the result of the right hon. Baronet's Motion in 1916, and has no relationship to the War. It was only right if a man's income fell that he should pay on the actual income, and not on a statutory income, which he was not receiving at the period, and I hope the Committee will show it is in favour of the Section being kept in the Bill, and on Report we can put a proper Clause down.
Mr. CHAMBERLAINOf course, the hon. Gentleman's attitude makes it necessary to oppose the Amendment. I cannot accept the Amendment on any such understanding, and we must take a Division.
§ Sir F. BANBURYI would suggest that it would be far better to accept the proposal of the Chancellor of the Exchequer, and see what happens on the Report stage. We do not want to extract any pledge from him on the understanding that he will take the words out, and on the Report stage it will be open to him to make any suggestions he likes. I hope the hon. gentleman will accept that.
§ Mr. HOLMESI am quite willing to accept the right hon. Baronet's suggestion, and I hope the Chancellor of the Exchequer will give us an opportunity on the Report stage of discussing it at a 1620 more appropriate time than this hour of the evening.
§ Amendment agreed to.
§ Mr. HOLMESI beg to move at the end of the paragraph beginning "8 and 9 Geo. 5, c. 40," to insert the words and Sub-section (4) of Section 6 of Rules applicable to Cases I and II of Rules applicable to Schedule D".
This is a very small Amendment, but it is rather important to the traders of the country who have machinery. The particular Section referred to is the one which lays down the Rule under which depreciation is allowed for machinery used in business, but Sub-section (4) appears to be in practice very unfair upon traders. Where a man makes profits and claims his depreciation each year, the thing goes through in a satisfactory way, but if he makes a loss in any year, so that there is no need to claim for depreciation, he is allowed to carry that forward year by year until he makes a profit, and then the accumulated depreciation is deducted before he has to pay Income Tax. This Sub-section, however, says that he must go each year to his local surveyor and must agree the allowance for depreciation, and have it carried forward in an official way. If that is not done, he loses his right, when his year of profit comes, to claim the accumulated amount for depreciation. I probably have had more experience in seeing surveyors of taxes than anyone here, and during the last few years they have been so short-handed that they wanted to put aside every bit of work that was unnecessary. If it appeared on the face of it that a company was not liable, let us say, to Excess Profits Duty, they did not want to work it out so as to see it exactly, but left it over until a year when a profit was made. It was the same with regard to machinery, and I can give a case in my personal experience where the matter was left over for five years. When the company concerned reached a year in which profits were made, the Surveyor of Taxes had changed and the new Surveyor proposed to disallow the back depreciation and quoted this Section in support of his contention. I was able to show from a file of correspondence that his predecessor had agreed to the matter being left in abeyance, and in this case the point was amicably settled. But there is 1621 no fairness in the Inland Revenue authorities taking advantage of the situation in any case. I ask the Chancellor to leave out that particular Section which makes it necessary for a taxpayer to claim each year, even though he is not liable for Income Tax, the amount of depreciation which should be carried forward to next year.
Mr. CHAMBERLAINThe points put by the hon. Member are well worthy of consideration, and I shall be glad to consider them if he will allow me time to see what is the effect of the views and the cases he has put before me. The actual words he has put on the Paper would produce results quite different from what he desires. I do not quite understand how they would touch his case. They certainly would do something which I am sure he would not want, and which would be inconvenient to the taxpayer. But I should be glad if he will allow me to consider the matter between now and the Report stage in the light of what he has said.
§ Amendment, by leave, withdrawn.
1622§ Further Amendment made: In paragraph beginning "9 and 10 Geo. 5, c. 32" leave out the words "to five, eleven".—[Mr. Chamberlain.]
§ Schedule, as amended, agreed to.
§ Motion made, and Question, "That the Chairman do report Progress; and ask leave to sit again," put, and agreed to.—[Mr. Chamberlain.]
§ Committee report Progress; to sit again To-morrow.
§ The remaining Orders were read, and postponed.
§ It being after half-past Eleven of the clock upon Wednesday evening, Mr. DEPUTY-SPEAKBR adjourned the House, without Question put, pursuant to the Standing Order,
§ Adjourned at Ten minutes before Twelve o'clock.