HC Deb 07 July 1927 vol 208 cc1585-8

"Section twenty-two of The Finance Act, 1922 (which relates to power to require delivery of particulars of income for purposes of super-tax) shall be amended by substituting for the words 'as they consider necessary' the words 'as may be reasonably necessary for computing the liability of the individual to super-tax'."—[Sir J. Marriott.]

Brought up, and read the First time.


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

This is not much more than a drafting Amendment. Under the first Sub-section of Section 22 of the Finance Act, 1922, it is recited that The Special Commissioners may, whether an assessment to super-tax has been made or not, require any individual who has been required to make a return of his total income for the purposes of super-tax to furnish to them within such time as they may prescribe, not being less than twenty-eight days, such particulars as to the several sources of his income and the amount arising from each source, and as to the nature and the amount of any deductions claimed to be allowed therefrom as they consider necessary. The words to which I want to draw the attention of the Attorney-General are the last, as they consider necessary. At the time when this Section was added to the Act of 1922 it was generally supposed that it would be used only in special cases where there was good reason to suppose that evasion was being practised on the part of the taxpayer. We have heard a good deal about this in recent discussions, and I suggest that an opportunity might be taken in the Finance Bill of this year to revert to what was undoubtedly the intention of this Section of the Act of 1922. My information is that this Section has by no means been used only in the way for which it was apparently and professedly designed. I am told that masses of detail information are required by the Special Commissioners, and that not infrequently the taxpayer is required to furnish information which is by no means relevant to his liability to Super-tax. I propose what is really not more than a drafting Amendment, though, I admit, a limiting one.


This new Clause has been moved before in the times of previous Governments, and uniformly rejected. It was brought forward in 1922, when the Clause we were discussing the other day was enacted, and my right hon. and learned Friend the Member for the Exchange Division of Liverpool (Sir L. Scott), who represented the Government on that occasion, said that the Clause was a vital one, and that the Amendment would go to the very root and render it most inadequate to check the mistakes as to Super-tax returns which were undoubtedly going on. The Revenue made an estimate of the saving which has been effected by the presence in the 1922 Act of the words as they now stand, and it, must amount, as nearly as they can estimate, to about £2,000,000 per annum. My right hon. and learned Friend the Member for the Exchange Division in 1922 gave a number of striking instances of where it had turned out, after someone had died, and the particulars were carefully examined, that for years returns had been made—possibly by mistake—understating income sometimes to the extent of thousands of pounds per annum. It is impossible for the Commissioners to know beforehand which are the accurate and which the inaccurate returns. All they can do is to ask for particulars in a certain number of cases and, from such information as they are able to obtain, they are able to cheek, from time to time, the kind of returns which are coming in. It has been suggested that the Commissioners are demanding all sorts of particulars on all sorts of topics. If they do so, they are exceeding their existing powers. All they can ask about are the sources of income, the amount from each source and the nature and amount of any deductions. I do not think they ever attempt to ask for such particulars as suggested; certainly they are not entitled to do so under the existing law. It is impossible for the Commissioners safely to accept a limitation of this kind, which would impose on them, in the case of anybody refusing to give particulars, the burden of proving in advance that the actual return was wrong, which in the nature of things they would not be able to do. On those grounds, is it no more possible now than it was in 1922, for the Government to ask the Committee to accept this proposal.


I am sorry the Government have not seen their way to accept this New Clause and, I regret to say, I have not quite followed the Attorney-General's objection to it. I do not know whether the right hon. and learned Gentleman has got his brief from the opposition offered in previous years to rather different Amendments. I fail to see how there can be any substantial loss to the Revenue by the alteration of the words proposed in the New Clause. The sole point of the proposal is whether the Special Commissioners are themselves to be the sole judges of what is reasonable. If they have endeavoured to obtain information which they consider reasonable but which nobody else considers reasonable, it seems to me they have been exceeding their proper duties, as the Attorney-General said. I do not think the Special Commissioners as a rule wish to exceed their proper duties but if there is the suggestion that this kind of thing has been done, I should have thought the Government and the Special Commissioners would have been only too glad to have the words altered so as to see that they were only required to get such information as might be reasonably necessary, instead of being left as sole judges. I am afraid at this time of night it is not much use pressing the matter, if the Government are determined, but I hope they will consider this sort of thing if the question is raised on a subsequent occasion.

Question "That the Clause be read a Second time," put, and negatived.