§ 70. Sir M. DOCKRELL
asked the Chancellor of the Exchequer how many millions of pounds were paid away in War stock interest on the 1st instant, which would have remained in hand if interest had been taxed at the source; and, seeing that the Revenue loses the use of this money for an average of 15 months, employs a large extra staff in the effort to collect it, and loses a large percentage of it in bad debts, will he consider whether a statement of Income Tax can be sent with the warrant, offering a discount if paid within a month, the receipt for its payment by the bank from which the warrant is issued being the voucher to the Inland Revenue authorities, and corresponding to the vouchers attached by joint stock companies to their payments of interest or dividend?
The amount paid in interest on 5 per cent. War Loan and 5 per cent. Exchequer Bonds, 1920, was approximately 444,500,000, on which Income Tax at 6s. in the pound would be nearly £13,500,000, much of which would be subject to claims for abatement. Payment without deduction at the source was promised to registered holders under the prospectuses of these issues, and I cannot vary this arrangement. Moreover, I am advised that, in view of the character and methods of graduation of the Income Tax, my hon. Friend's proposal would not be practicable. The Royal Commission on the Income Tax reported against any extension of discount for prepayment of tax.
§ Mr. A. M. SAMUEL
Will the right hon. Gentleman consider the advisability of allowing the Bank of England to retain the Income Tax, provided the owner of the stock gives a written request that such Income Tax may be retained?
§ Sir M. DOCKRELL
May I ask the right hon. Gentleman whether he does not think that the use of £13,500,000 for 15 months is a serious question worth considering? He has himself invited Members of this House to make suggestions, and I think that is a business suggestion.
If my hon. Friend will be good enough to read the answer, he will see that the £13,500,000 never reaches the Exchequer. That would be the amount if all the recipients were liable to the full rate of the tax.
§ Sir M. DOCKRELL
Is the tax not deducted at the source at 6s. in the pound, irespective of what it may ultimately have to be? Therefore the £13,500,000 is deducted at the source.