HC Deb 13 July 1920 vol 131 cc2339-44

(1)Corporation Profits Tax shall be assessed by the Commissioners of Inland Revenue and shall be payable on the expiration of two months from the date on which it is assessed.

(2)Where a company on whose profits the tax is to be assessed is a British company the tax shall be assessed on the company, and where the company on whose profits the tax is to be assessed is a foreign company the tax shall be assessed on the company in the name of any agent, manager, factor or other representative of the company.

(3)Where a company is in the course of being wound up, the liquidator, receiver or other person having the control of the assets of the company shall not distribute the same until provision has been made to the satisfaction of the Commissioner of Inland Revenue for the payment of any Corporation Profits Tax for which the company may be liable.

Any liquidator, receiver or such other person as aforesaid who distributes the assets of the company without making such provision as aforesaid shall be liable to a fine not exceeding three times the amount of any Corporation Profits Tax which may be payable.

(4)An assessment (including an additional assessment) may be made by the Commissioners of Inland Revenue at any time within six years after the end of the accounting period in respect of the profits on which the assessment is made, and in the absence of a satisfactory return or other information on which to make an assessment the Commissioners may make an assessment according to the best of their judgment.

(5)The amount of Corporation Profits Tax payable shall be recoverable as a debt due to His Majesty from the company on which it is assessed, or in the case of a foreign company from the person in whose name the company is chargeable, and where the amount of tax payable is less than fifty pounds the tax shall, without prejudice to any other remedy, be recoverable summarily as a civil debt.

(6)Any company which is dissatisfied with the amount of any assessment made upon it by the Commissioners of Inland Revenue under this Part of this Act may appeal to the Commissioners for the general purposes of Income Tax acting for the division in which the company is assessed for Income Tax or to the Commissioners for the special purposes of the Income Tax Acts, and those Commissioners shall have power on any appeal, if they think fit, to summon witnesses and examine them upon oath.

The power under Section one hundred and ninety-six of the Income Tax Act, 1918, to require an appeal in Ireland to the Special Commissioners to be reheard by the County Court Judge, or Chairman of Quarter Sessions, or Recorder, shall apply to an appeal in Ireland under this provision.

Section one hundred and forty-nine of the Income Tax Act, 1918 (which relates to the statement of a case on a point of law), shall apply with the necessary modifications in the case of any appeal to the General or Special Commissioners under this Section, or of the rehearing of any such appeal in Ireland, as it applies in the case of appeals to the General or Special Commissioners under the Income Tax Acts.

(7)The amount of any Corporation Profits Tax assessed by the Commissioners of Inland Revenue shall be payable notwithstanding any appeal under this Section, except in cases where the Commissioners direct to the contrary, but the Commissioners shall make such repayments, if any, as are necessary to give effect to any decision on appeal as soon as possible after the decision has been given.

(8)The Commissioners of Inland Revenue may make Regulations with respect to the assessment and collection of the Corporation Profits Tax and the hearing of appeals under this Section, and may by those Regulations apply and adapt any enactments relating to the assessment and collection of Income Tax, or the hearing of appeals as to Income Tax by the General or Special Commissioners, which do not otherwise apply.

(9)All Commissioners and other persons employed for any purpose in connection with the assessment or collection of Corporation Profits Tax shall be subject to the same obligations as to secrecy with respect to Corporation Profits Tax as those persons are subject to with respect to Income Tax, and any oath taken by any such person as to secrecy with respect to Income Tax shall be deemed to extend also to secrecy with respect to Corporation Profits Tax.

Colonel GRETTON

I beg to move, in Sub-section (1), to leave out the words "by the Commissioners of Inland Revenue," and to insert instead thereof the words " in the same manner in all respects as Income Tax under Schedule D."

The Corporation Tax is to be assessed in the same manner as the Income Tax, but I think that these particular words must have slipped in without their meaning having been recognised. This new tax is to be assessed by the Commissioners of Inland Revenue. What I propose is that the tax should be assessed in the same manner in all respects as the Income Tax under Schedule D. That reserves the right of local appeal, and the right of ultimate appeal which all payers of Income Tax possess. Proposals have been made that the Commissioners of Inland Revenue shall be the authorities to assess the tax and collect it. The assessment and payment of the tax are matters of very great importance. I suggest that it should stand on all fours with the Income Tax, and if a change is considered wise after careful investigation, that this new Corporation Tax should go on the same lines as the Income Tax. Anyway, I think this matter should not be inserted here, and it should not be settled by a casual Clause. I urge the right hon. Gentleman to accept my Amendment or something equivalent to it, and not raise great and far-reaching problems which will affect the whole system of Income Tax assessment as well as assessment for this new tax.

Mr. CHAMBERLAIN

I certainly do not want to open up at this point or at this hour of the night the whole question of assessing Income Tax, but this has not been done by me, but by my hon. Friend, who treats the Income Tax as if it was the only analogy to this tax, and as if everything done in connection with this tax was to be done by the Income Tax Commissioners in connection with other taxes. I would appeal to other pre cedents. There are the Estate Duties, the Excess Profits Duty, and the Supertax. The procedure of the Income Tax applies to all of them, and the procedure is similar to that which we propose to apply here in the case of the Corporation Tax. If a taxpayer feels himself aggrieved by the assessment which the Board makes, he has the right of appeal either to the General Commissioners of Income Tax or to the Special Commissioners of Income Tax. The option which he enjoys is exactly the same as the option which he has in connection with assessment for Income Tax under Schedule D. Accordingly, without in the least prejudging the question raised by the Royal Commission on Income Tax, and without endeavouring to settle or to discuss what we should do in connection with Income Tax, I ask the Committee to deal with this tax as with Estate Duty or Super-tax, and leave the assessment to the Board, which gives the taxpayer, if aggrieved, the right of appeal.

Colonel GRETTON

The right hon. Gentleman is not inclined to accept the views I wish to press upon him. In asking leave to withdraw this Amendment, I must reserve to myself the right to raise this matter again on Report stage and press it on the attention of the whole House.

Amendment, by leave, withdrawn.

Colonel GRETTON

I beg to move, in Sub-section (4), to leave out the words "six years" ["within six years"] and to insert instead thereof the words "one year."

This Sub-section gives the Commissioners of Inland Revenue the right to make an assessment at any time within six years. Such a proposal is entirely new. The usual provision for Income Tax allowed an additional assessment to be made any time within a few months. This was altered subsequently to allow an additional assessment to be made within a period of three years. There has been a great deal of evidence taken by the Royal Commission with regard to this period of three years, and I think I am right in saying that it was agreed by the evidence submitted that the period of three years was too long and led to very great inconvenience. In this new proposal an additional assessment may be made for the new Corporation Tax for as long a period after the original assessment as six years. Really that is quite wrong, and I propose that the period of six years should be reduced to one year. That period is surely quite long enough. Surely the right hon. Gentleman will be able to meet me on this matter. If he thinks that the period of one year, which I suggest, is too short he will at any rate agree that the period of six years is far too long, and he has no justification whatever to exceed the three years under the existing arrangement.

Mr. CHAMBERLAIN

The evidence given before the Income Tax Commission has produced a different impression on my hon. Friend's mind from that produced on ours. The Commission recommend that the time in which it should be competent to make an additional assessment should be any time within six years after the end of the year's assessment, and in cases of fraud that there should be no time limit for the recovery of the tax. Well, that is the answer why we took this. It is following upon the analogy of that recommendation that we have made our proposals in this Bill. I am willing to meet my hon. Friends. Certainly one year would be too short, but I will take the three years if my hon. Friend will withdraw his Amendment and substitute three years, and I or my successors, when the Income Tax Clause is changed, will bring this proposal with regard to Corporation Tax under review.

Colonel GRETTON

I accept that, and will withdraw my Amendment and substitute three years.

Amendment, by leave, withdrawn.

Amendment made: In Sub-section (4) leave out the word "six," and insert instead thereof the word "three."— [Colonel Gretton. ]

Colonel GRETTON

I beg to move, "to leave out Sub-section (7)."

This Sub-section is a new proposal. In the case of appeal against an Income Tax assessment I think I am right in saying that for similar taxation the tax is not levied during appeal. This is an entirely new provision, that the original assessment is to stand notwithstanding the appeal unless the Commissioners direct to the contrary. That power should not be in the hands of the Commissioners. We should not be mulcted in too high an assessment and have to make too high a payment, although we are exercising the right we have under this Bill. We should be able to appeal against a too high, or what we may consider an unjust assessment. I believe the analogy is taken from War legislation. I understand that in the Excess Profits Duty, which was War legislation, there was a similar provision. The Government then was in very urgent need of money under the stress of War, and there may have been justification. This and many other things were necessary owing to the stress of War emergency. We are now legislating for peace measures, although they may be applied to War purposes, and there is no excuse for these measures. This Sub-section is no longer required. It may impose very great hardship in, cases where appeals are pending. It is a new tax. There is no interest allowed and the money is taken. The appeal may be held up, and the Government has no great interest in getting the appeal settled, and a considerable sum of interest may accrue from year to year which is not repayable. The taxpayer has to find this money and finance the Government, though he may have been inequitably charged.

Mr. CHAMBERLAIN

I am ready to accept the Amendment, It follows the analogy of the Excess Profits Duty, as my hon. Friend said, and it was put in in order to prevent people delaying the payment or satisfaction of these obligations by frivolous appeals or appeals on quite subsidiary grounds. I am ready to omit the Sub-section. Of course, if such an abuse arises, Parliament would have to take action.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

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 then read and postponed.

It being after half-past Eleven of the clock upon Tuesday evening, Mr. Deputy-Speaker adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Thirteen minutes before Two o'clock a.m.