HC Deb 12 July 1922 vol 156 cc1315-7

(1) Where, in pursuance of any public general Act of Parliament, superannuation allowances or gratuities are payable to individuals holding an office or employment on their retirement or to their legal personal representatives on their death, and such individuals are by any such Act required to make contributions towards the expenses of providing the allowances and gratuities, the sums so contributed by any such individual for any year may be deducted from the amount of his emoluments to be assessed to Income Tax for that year: Provided that where any such sums are to be repaid to any individual under the authority of any such Act as aforesaid, the person by or through whom the sums are to be repaid shall deduct from those sums an amount equal to the total amount of the Income Tax which would have been paid in respect of those sums if they had not bee;) allowed as deductions under the authority of this Section, and if those sums are repaid with any interest thereon, shall also deduct therefrom an amount equal to the total amount of the Income Tax which would have been paid in respect of that interest if it bad actually been paid to the individual in the several years in respect of which it is paid, and the provisions of paragraph (2) of Rule twenty-one of the General Rules shall apply in regard to the accounting for and recovery of the amounts so deducted.

(2) Any person having the custody of the books containing the assessments to Income Tax on any individual for the several years in respect of which sums are repayable to him as aforesaid shall, notwithstanding any thing contained in any declaration made by that person in pursuance of Section eighty- nine of the Income Tax Act, 1918, on application by the person by or through whom the sums are repayable, furnish to him such particulars as may be necessary to enable him to compute the appropriate amount of Income Tax to be deducted and paid over by him as aforesaid.—[Sir L. Scott.]

Brought up, and read the First time.

Sir L. SCOTT

I beg to move, "That the Clause be read a Second time"

This Clause is one designed to fill a gap left by Clause 32 of the Finance Act of last year. The House will remember that last year a Clause was introduced into the Finance Bill providing that contribu- tions to superannuation funds should be free from Income Tax, and that the income of the funds also should be free. Certain conditions were attached to that concession, one being that a fund had to be approved by the Board of Inland Revenue so as to make certain it was not a bogus fund, but was a real superannuation fund. Since last year it has become clear that there is a similar type of case which requires to be met—the cost of contributions made, under statutory authority and obligation, toward pensions and superannuation allowance as, for instance, under the Police Pensions Act, 1921. A similar case will arise when the Bill now before the House providing for superannuation of teachers, under which the teachers are to make contributions, becomes law. In neither of those two cases is there any fund, and, therefore. Section 32 of the Act of last year does not cover it, but, in principle, there is no difference between a contribution to a fund by arrangement between employers and employed and a contribution made under statutory obligation for an exactly identical purpose. For that reason it was thought necessary that the gap should be filled. The beneficiaries of this provision are a class of the community which, I should like to say, for the benefit of members of the Labour party, are many of them representatives of the working classes or similar classes in this country. On the last Clause the Government were accused—and accused vindictively and viciously—of class legislation. This is another case of class legislation, but in this particular case the class concerned is the working class, and I wish to point out to hon. Members opposite in particular that the Government metes out even-handed justice to all classes of the community, and favours no class at the expense of others, or one more than another.

Mr. RAFFAN

I can assure my hon. and learned Friend I do not approach this in any spirit of controversy,. but a question was raised in the Standing Committee dealing with the Teachers' Superannuation Bill to-day which was regarded there as a matter of some importance to the teachers. It was proposed to relieve the teachers from Income Tax on contributions deducted under the Teachers' Superannuation Bill, and with that I am in entire agreement, but in many cases the teacher, if he retires, will be able to secure a return of his contributions. It was pointed out that if you impose Income Tax upon him in the year in which he withdraws the sum, it may boar more hardly than if he paid Income Tax year by year, because he would draw a considerable sum which might, in some cases, put him in the position of being unable to secure exemption. So that, as a matter of fact, this provision might put such person in a worse position. I do not say that is the desire of the right hon. Gentleman, but if he can give any assurance to-day, or, if the matter be entirely new to him, any assurance that he will give the matter consideration, I am quite sure it will be greatly appreciated by many members of the teaching profession.

Sir L. SCOTT

I think that in the case of contributions being returned, so that the Income Tax on them would become automatically payable on the ordinary principle, it: would be on the same footing as if it had been paid originally— that the person who received back his contributions would be put in no worse position by reason of the return.

Clause read a Second time, and added to the Bill.