§ 26. Colonel Sir ARTHUR HOLBROOKasked the Chancellor of the Exchequer whether he is aware that a military officer holding an appointment entitling him to a house, but for whom no house is available, is being charged Income Tax on the allowance made to him in lieu of a house, and that he has also to pay Income Tax under Schedule A on the annual value of the house rented by him with that allowance; and whether he will consider the desirability of making alterations in the Regulations to relieve military officers of this duplication of the tax?
Mr. GUINNESSThe hon. and gallant Member appears to be under a misapprehension in supposing that there is any duplication of taxation in the circumstances to which he refers. It is the case that an officer in His Majesty's Army who is in receipt of a money allowance in lieu of official quarters is charged to Income Tax on that allowance in cases where he holds an appointment for a fixed or practically fixed term, and that as tenant of a house which he rents, he may be called upon to pay Income Tax under Schedule A, in respect of the annual value of that house. As, however, he is entitled to deduct Income Tax on making payment of his rent, the burden of the tax paid in respect of the house is not ultimately borne by him.
§ Sir A. HOLBROOKIs the right hon. Gentleman aware that the officer who draws an allowance in lieu of the house is taxed on that allowance and therefore he pays the tax twice on the value of the house?
Mr. GUINNESSPresumably he rents a house, and in that case he is entitled under the law to deduct it from the landlord.