§ 40. Mr. PENNEFATHERasked the Lord Privy Seal if his attention has been drawn to statements which are being made to the effect that Members of this House can get round the decision of Parliament and evade Income Tax by claiming that their entire salary has gone in expenses; that this will throw a burden of over £200,000 on the taxpayer; that the Government has invited Members to claim 1542 a refund of Income Tax paid by them during the last three years, and that Members of this House are therefore being given an unfair advantage over other taxpayers; whether all or any of these statements are based on misconceptions; and, if so, will he make a statement explaining the nature of the misconceptions?
Mr. CHAMBERLAINThese statements are, I presume, based on a misapprehension of the law, for they are altogether incorrect. There has been no suggestion that the decision of Parliament should be evaded or that Members should be relieved of any liability to Income Tax lawfully due under the provisions of the Income Tax Acts. The exact reverse is the case. The decision was that Members should be left to establish individually their claims for the Income Tax allowances for expenses (in excess of the flat rate deduction of £100) in the ordinary legal course. Any person assessable under Schedule E in respect of the emoluments of an office or employment of profit is entitled to a deduction for expenses incurred and defrayed out of the emoluments of the office wholly, exclusively, and necessarily in the performance of the duties of the office. Members' salaries fall within this general principle of the law. In the second place any taxpayer may claim a refund in respect of such expenses or other legal rebates and allowances retrospectively for a period not exceeding three years. It is therefore the exact reverse of the truth to state that Members are being given a privilege not known to the law and not enjoyed by other taxpayers in like circumstances. On the contrary, Members of this House are being treated strictly in accordance with the law, and are receiving no privilege or right not conferred by law on all taxpayers similarly situated. In the past Members have often voluntarily forgone the exercise of their statutory rights and the Revenue has therefore received more than the law declared to be due. If they now exercise their rights the Revenue will receive all to which it is entitled under the law.
Lieut.-Colonel J. WARDCan the right hon. Gentleman give any explanation of this complete hostility to any advantage being given to the poorer Members of the House by the wealthy Members?
Mr. CHAMBERLAINThe hon. and gallant Gentleman has entirely miscon- 1543 ceived the intention of my hon. Friend who put this question. It was not an attack upon his fellow Members but a desire to correct an aspersion upon Parliament which is wholly without foundation and which affects the honour of us all, rich or poor alike, and which is as mischievous as it is misinformed.