§ 94. Rear-Admiral ADAIRasked the Parliamentary Secretary to the Admiralty whether the Admiralty have recently decided to deduct Income Tax from the lodging allowances of officers employed in duties on shore and to make this reduction retrospective; whether discrimination is made as between officers paid from Vote 1 and those paid from Vote 12 of the Navy Estimates; if this is so, will he say what is the authority in virtue of which this deduction is made, why it is made retrospective, and why such discrimination is made; and whether the Admiralty have made these decisions on their own authority or whether it is due to action on the part of the Inland Revenue authorities?
§ Mr. AMERYThe answer is a long one, and, with the hon. and gallant Gentleman's permission, I will circulate it in the OFFICIAL REPORT.
§ Rear-Admiral ADAIRIs it not the case invariably that these allowances, both in the Army and the Navy, are looked upon as pressing and necessary to meet the conditions under which they live?
§ Mr. AMERYNo. When the hon. and gallant Gentleman sees the full answer he will realise the difference between temporary and permanent allowances. All permanent allowances are subject to Income Tax.
§ The following is the answer promised:
§ Lodging allowance is not exempt from Income Tax unless the appointment in respect of which such allowance is paid is purely of a temporary nature. During the War there were many appointments which, although perhaps not altogether of a temporary nature, conferred no security of tenure, and in such cases it was decided to treat them as temporary, with consequent exemption from Income Tax on the allowance. The whole position was necessarily reconsidered on the termination of the War, and orders have recently been issued that the lodging allowance of officers serving in coastguard and estab- 859 lishment appointments, which are now for a fixed term, should be assessed for Income Tax as from the 1st September last, the day following the statutory date of the termination of the War. I may say that the decision in the matter is in accordance with an arrangement arrived at with the Inland Revenue Department. As regards the second part of the question, I should state that no discrimination is made as between Vote and Vote. The difference is between a fixed appointment and a temporary appointment. The question of extending the principle of assessing for Income Tax the lodging allowance of other appointments paid out of Vote 1, which have hitherto been of a semi-temporary nature, is now under consideration.