§ No Income Tax shall be payable on the income of any regimental benevolent association fund or society carried on for the solo purpose of promoting the well-being and assisting the welfare of those connected in the past or the present with the regiment concerned.—[Brigodier-General Makins.]
§ Brought up, and read the First time.
§ Brigadier-General MAKINSI beg to move, "That the Clause be read a Second time."
I asked a question of the Chancellor of the Exchequer only last Tuesday, and he courteously replied that he would look into any particular case that I brought before him. I find it is not a question of a particular case, but a question of the general policy towards regimental benevolent associations. In the first place, the object of these associations is to look after soldiers' wives and their dependants. The income is derived from annual subscriptions and from dividends on invested funds. The regiments for which I have a particular brief are fourteen cavalry regiments which were banded together under one central 2194 association. They are banded in this way in order to avoid extra expense, organisation, secretaryships, and so on. There is one particular case in which I am interested, the case of my own regiment. In 1910 I formed all its funds into a trust myself, under the Public Trustee. Later at the end of the War there were further legacies left and further funds, and the Public Trustee was asked to invest these funds, and he wrote the following letter: "The Public Trustee much regrets he has now no power to accept this Trust, as he is prevented by the Act of 1906 from accepting a Trust which is exclusively charitable." The Public Trustee at that time was a great lawyer, and he ought to know what is a charitable trust and what is not.
4.0 A.M.
Now, this bombshell has been burst upon us, and we are told we are not to receive the rebate of Income Tax any longer. A letter has been 4.0 A.M. received from the Chief Inspector of Taxes saying that the claim for repayment has been under consideration, and from the evidence supplied it would appear that the objects and constitution of the association were 2195 such that it could no longer be regarded as falling within the legal definition of a charity. The chairman of the association interviewed the Chief Inspector of Taxes, and was told that we could no longer be regarded as a charity, as the rules were no longer stabilised, and though the funds were used in the past for charity, there was no guarantee that they would be in the future. One might almost call that a quibble. The object of the association was to promote the welfare of soldiers and assist those who were no longer able to earn their own livelihood. I can only speak of absolute knowledge of 14 regiments, but I understand that other regiments are in exactly the same position, and the Guards and the Royal Artillery and the Royal Engineers are likewise not going to get this rebate which they have always had in the past. Curiously, two cavalry regiments had forms sent to them to state the income used for charitable purposes. It showed a mix up if two regiments got those forms, but were told they would not get the rebate in the future. Those benevolent associations did a great deal of good, and there was not much money involved. They looked after men who did not want to go to a charitable institution or ask for charity, but who liked to think that their old regiment would look after them, and they assisted in unemployment, and to a certain extent in emigration. They also assisted men's wives and dependants. The money involved was very small. In the case of my own regiment, it is under £25, and I do not suppose the total would involve more than £2,000 at the outside. The net might have to be drawn fairly close, but I am sure the officials of the Inland Revenue Department would rather act with justice and safeguard the public rather than act as sleuth-hounds. I feel that the Chancellor of the Exchequer will either accept this Clause or give an assurance that this, what I might almost call a ramp, will not be proceeded with.
Mr. GRAHAMI am quite sure that on reconsideration the hon. and gallant Member would hardly apply the term "ramp" to the existing state of the law. The truth is that, going no further back to-night than the time of Queen Elizabeth, the term "charitable relief" could in point of fact for Income Tax purposes 2196 be held to include the relief of poverty, the advancement of education and religion, and nearly anything for the welfare of the community. There is a Section in the Act. of 1918 which, I think, completely covers the kind of case which the hon. and gallant Member has in mind, and it lays down that, if the organisation devotes its funds and resources to a purely charitable purpose it can get complete exemption from the tax. The difficulty is that a certain number of associations do not confine their efforts merely to the relief or the assistance of their members, or what may accurately be called charitable objects. They are, in fact, engaged in other enterprises which are quite properly the subject of taxation, and if they were not taxed, there would be injustice to other classes of taxpayers upon whom the burden would fall. A line must be drawn in all these cases in any system, but if any society or organisation of this kind will give a binding guarantee to apply its funds exclusively to the charitable objects which he has described there is not the slightest difficulty in getting complete exemption. That being so, the Amendment would appear to be unnecessary.
One word, in conclusion, about the so-called "ramp." Quite properly, the Inland Revenue authorities have had to direct their attention to the activities of these organisations in certain cases, and to the fact that they are engaging in other than charitable enterprises. That being so, there may be some alteration in an exemption which they have hitherto enjoyed, but, quite clearly, they no longer satisfy the terms of the exemption in the Act of 1918. We are always willing to look into any particular case, but looking to the fact that you can get the exemption if the society confines itself to charitable terms, I suggest that the new Clause is unnecessary.
§ Mr. LUMLEYMay I refer to a society the objects of which are clearly stated in their printed rules: There are only two of them, which I will read—
2197 I suggest that these objects are purely charitable objects, and ought to be exempted.
- "(1) To promote the welfare of discharged and serving soldiers of the regiment and to assist those who through no fault of their own are unable to earn their own livelihood.
- (2) To assist the wives and families of old or serving Royals who are in distressed circumstances."
§ Lord EUSTACE PERCYMay I ask one question. The Financial Secretary says that various of these associations have been engaged, or are engaged, in enterprises which are properly subject to taxation. Can he give us an instance of what these enterprises are?
Mr. GRAHAMThere are cases of some of them being engaged in minor forms of trade. It would be difficult offhand to give examples, but I know some which have gone in for the provision of hostels and institutions which are not
§ strictly of the nature of charitable assistance or relief, and which, I am afraid, take them out of the strict category of charitable organizations. In reply to the hon. Member for East Hull (Mr. Lumley), I can only suggest at the moment that in all probability the society has failed under the first rule—that it has imported into its activities some element which is not strictly of a charitable character. That may be the explanation, but it is only a suggestion, as I am not in possession of the details.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 83; Noes, 176.
2199| Division No. 144.] | AYES. | [4.13 a.m. |
| Balfour, George (Hampstead) | Hannon, Patrick Joseph Henry | Ralne, W. |
| Barnston, Major Sir Harry | Harland, A. | Rhys, Hon. C. A. U. |
| Birchall, Major J. Dearman | Harmsworth, Hon. E. C. (Kent) | Richardson, Lt.-Col. Sir P. (Chrtsy) |
| Bird, Sir R. B. (Wolverhampton, W.) | Huntington, Marquess of | Roberts, Samuel (Hereford, Hereford) |
| Blades, Sir George Rowland | Harvey, C. M. B. (Aberd'n & Kincardne) | Ropner, Major L. |
| Bowyer, Capt. G. E. W. | Hennessy, Major J. R. G. | Roundell, Colonel R. F. |
| Briant, Frank | Herbert, Dennis (Hertford, Watford) | Russell, Alexander West (Tynemouth) |
| Brittain, Sir Harry | Hope, Rt. Hon. J. F. (Sheffield, C.) | Samuel, A. M. (Surrey, Farnham) |
| Burman, J. B. | Howard, Hn. D. (Cumberland, Northn.) | Sandeman, A. Stewart |
| Chadwick, Sir Robert Burton | Hughes, Collingwood | Savery, S. S. |
| Chamberlain, Rt. Hon. N. (Ladywood) | Inskip, Sir Thomas Walker H. | Shelfield., Sir Berkeley |
| Clayton, G. C. | Kindersley, Major G. M. | Shepperson, E. W. |
| Cope, Major William | King, Captain Henry Douglas | Smith-Carington, Neville W. |
| Courthope, Lieut-Col. George L. | Lumley, L. R. | Spero, Dr, G. E. |
| Crooke, J. Smedley (Deritend) | Maitland, Sir Arthur D. Steel- | Starmer, Sir Charles |
| Curzon, Captain Viscount | Makins, Brigadier-General E. | Steel, Samuel Strang |
| Dalkeith, Earl of | Moore-Brabazon, Lieut-Col. J. T. C. | Warrender, Sir Victor |
| Dawson, Sir Philip | Morrison Bell, Major Sir A. C. (Honiton) | Wells, S. R. |
| Dixey, A. C. | Moulton, Major Fletcher | Wheler, Lieut.-Col. Granville C.H. |
| Eden, Captain Anthony | Newman, Sir R. H. S. D. L. (Exeter) | Williams, A. (York, W. R., Sowerby) |
| Eyres-Monself, Com. Rt. Hon. B. M. | Nicholson, O. (Westminster) | Williams, Maj. A.S. (Kent, Sevenoaks) |
| Ferguson, H. | Nield, Rt. Hon. Sir Herbert | Wllson, Sir C. H. (Leeds, Central) |
| Gates, Percy | O Neill, Rt. Hon. Hugh, | Windsor Clive, Lieut.-Colonel George |
| Gaunt, Rear-Admiral Sir Guy R. | Penny, Frederick George | Wise, Sir Fredric |
| Gibbs, Col Rt. Hon. George Abraham | Percy, Lord Eustace (Hastings) | Yerburgh, Major Robert D.T. |
| Greene, W. P. Crawford | Perkins, Colonel E. K. | |
| Greenwood, William (Stockport) | Philipson, Mabel | TELLERS FOR THE AYES.— |
| Hacking, Captain Douglas H. | Pielou, D. P. | Mr. Storry. Deans and Mr. Remer. |
| Hall, Lieut.-Col. Sir F. (Dulwich) | Pownall, Lieut. Colonet Assheton | |
| NOES. | ||
| Ackroyd, T. R. | Compton, Joseph | Graham W. (Edinburgh Central) |
| Acland, Rt. Hon. Francis Dyke | Comyns-Carr, A. S. | Greenwood, A. (Nelson and Colne) |
| Adamson, Rt. Hon. William | Costello, L. W. J. | Grenfell, D. R. (Glamorgan) |
| Adamson, W. M. (Staff., Cannock) | Cove, W. G. | Grundy, T. W. |
| Alexander, A. V. (Sheffield, Hillsdro') | Cowan, D. M. (Scottish Universities) | Guest, Dr. L. Haden (Southwark, N.) |
| Ammon, Charles George | Crittall, V. G. | Hall, F. (York, W.R., Normanton) |
| Aske, Sir Robert William | Darblshire, C. W. | Hall, G. H. (Merthyr Tydvil) |
| Attlee, Major Clement R. | Davies, Rhys John (Westhoughton) | Hardle, George D. |
| Baker, Walter | Dickie, Captain J. P. | Hartshorn, Rt. Hon Vernon |
| Banton, G. | Dickson. T. | Harvey, T. E. (Dewsbury) |
| Barclay, R. Noton | Dodds, S. R. | Haycock, A. W. |
| Barnes, A. | Duckworth, John | Hayday, Arthur |
| Batey, Joseph | Dukes, C. | Henderson, A. (Cardiff, South) |
| Birkett, W. N. | Duncan, C. | Henderson, T. (Glascow) |
| Bonwick, A. | Edwards, G. (Norfolk, Southern) | Henderson, W. W. (Middlesex, Enfld) |
| Broad, F. A. | Egan, W. H. | Hillary, A. E. |
| Bromfield, William | Falconer, J. | Hindle, F. |
| Brown, A. E. (Warwick, Rugby) | Fletcher, Lieut. Com, R. T. H. | Hirst, G. H. |
| Brown, James (Ayr and Bute) | Gardner. B. W. (West Ham, Upton) | Hobhouse, A. L. |
| Buckle, J. | George, Major G. L. (Pembroke) | Hodges, Frank |
| Charleton, H. C. | Gibbins, Joseph | Hoffman, P. C. |
| Clarke, A. | Gillett, George M. | Howard, Hon. G. (Bedford, Luton) |
| Climie, R. | Gosling, Harry | Hudson, J. H. |
| Collins, Sir Godfrey (Greenock) | Gould, Frederick (Somerset, Frome) | Isaacs, G. A. |
| Jackson, R.F. (Ipswich) | Mills, J. E. | Snell, Harry |
| Jenkins, W. (Glamorgan, Neath) | Mond, H. | Snowden, Rt. Hon. Philip |
| Jenkins, W. A. (Brecon and Radnor) | Morris, R. H. | Spence, R. |
| John, William (Rhondda, West) | Morrison, Herbert (Hackney, South) | Spoor, B. G. |
| Johnston, Thomas (Stirling) | Morrison, R. C. (Tottenham, N.) | Stamford, T. W. |
| Johnstone Harrcourt (Willesden, East) | Morse, W. E. | Stranger, Innes Harold |
| Jones, C. Sydney (Liverpool, W. Derby) | Mosley, Oswald | Sturrock, J. Leng |
| Jones, J.J. (West Ham, Silvertown) | Murray, Robert | Sunlight, J. |
| Jones, Rt. Hon. Leif (Comborne) | Murrell, Frank | Tattersall, J. L. |
| Jones, Morgan (Caerphilly) | Naylor, T.E. | Terrington, Lady |
| Jones, T. I. Mardy (Pontypridd) | Nixon, H. | Thomson, Trevelyan (Middlesbro. W.) |
| Jowitt, W. A. (The Hartlepools) | Oliver, P. M. (Manchester, Blackley) | Thornton, Maxwell R. |
| Kay, Sir R. Newbald | Paling, W. | Thurtle E. |
| Kedward, R. M. | Palmer, E. T. | Tout, W. J. |
| Keens, T. | Parkinson, John Allen (Wigan) | Vivian, H. |
| Kirkwood, D. | Pattinson, S. (Horncastle) | Wallhead, Richard C. |
| Lamb, J. Q. | Perry, S. F. | Ward, G. (Leicester, Bosworth) |
| Lansbury, George | Pethick-Lawrence, F. W. | Watson, W. M. (Dunfermline) |
| Laverack, F. J. | Phillipps, Vivian | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Law, A. | Potts, John S. | Wedgwood, Col. Rt. Hon. Josiah C. |
| Lawson, John James | Purcell, A. A | Whiteley, W. |
| Leach, W. | Raffety, F, W. | Williams, David (Swansea, E.) |
| Lee, F. | Rathbone, Hugh R. | Williams, Dr. J. H. (Llanelly) |
| Lessing, E. | Rea, W, Russell | Williams, Col. P. (Middlesbrough,E.) |
| Linfield, F. C. | Richards, R. | Williams Lt.-Col. T.S.B. (Kenningtn.) |
| Loverseed, J.F. | Richardson, R. (Houghton-le-Spring) | Williams, T. (York, Don Valley) |
| Lunn, William | Robertson, J. (Lanark, Bothwell) | Willison, H |
| Mc Entee, V. L. | Romeril, H. G. | Wilson, C. H. (Sheffield, Attercliffe) |
| Mackinder, W. | Royle, C. | Wilson, R. J. (Jarrow) |
| Maclean, Neil (Glasgow, Govan) | Scurr, John | Windsor, Walter |
| Mansel, Sir Courtenay | Seely, H. M. (Norfolk, Eastern) | Wright, W. |
| March, S. | Sexton, James | Young, Andrew (Glasgow, Partick) |
| Marley, James | Sherwood, George Henry | TELLERS FOR THE NOES— |
| Martin, F. (Aberdeen & Kinc'dine, E.) | Short, Alfred (Wednesbury) | Mr. Kennedy and Mr. Warne. |
| Martin, W. H. (Dumbarton) | Smith, Ben (Bermondsey, Rotherhithe) | |
| Middleton, G. | Smith, W. R. (Norwich) |