HC Deb 14 April 1930 vol 237 cc2673-5

This, of course, does not go very far towards meeting a requirement of £31,714,000, and, in fact, I am left with practically £29,000,000 still to find. Before I submit to the Committee my main proposals for raising this amount, perhaps it will not be out of place if I proceed first to outline certain proposals that I desire to make, which are directed primarily to strengthening and improving the taxation code rather than to the provision of the additional revenue that is required. The most important of these proposals relate to the legal avoidance of direct taxation. The Committee will agree with me that, where taxation is heavy, Parliament must strive to hold the balance fairly. The right hon. Gentleman dealt in 1927 with avoidance of Super-tax. He then stated his intention to deal later with the avoidance of Estate Duty, but he was not able to pursue his wish. I propose legislation to prevent avoidance of Estate Duty on landed estates and investments through the medium of private companies. Further, I shall ask the Committee to deal with the avoidance of Surtax by single premium insurance policies, and to give the taxing authorities rather wider powers of obtaining information in regard to the ownership of income. As regards single premium policies, I am proposing a Resolution which is necessarily wide in its terms, but this need excite no alarm in the minds of hon. Members. When they have the Finance Bill before them, they will see that all necessary precautions have been taken against any interference with ordinary life insurance, and that it is not proposed to go farther than is necessary to protect the Exchequer against transactions, not only calculated to avoid, but aimed at the avoidance, of liability to Surtax. These are matters of some complexity, and if for that reason I say no more about them now, there will be plenty of other opportunities of examining them in detail.

In addition to these proposals with regard to tax avoidance, the Finance Bill will contain a number of provisions relating to Inland Revenue Duties which it may be convenient for me to touch. upon at this stage. I propose an alteration of the law in regard to the liability of non-resident persons trading in this country through agents. There is no question that more urgently calls for uniform treatment by all countries that levy an Income Tax than that of taxing the foreigner who trades through an agent. British traders in foreign countries regularly encounter difficulty by reason of the view taken by those countries as to the proper solution of the question It is important, therefore, that we should have our own house in order if we are to ask for fair treatment for our traders abroad. I propose to amend the law so as to make it possible to make reciprocal arrangements with foreign countries. under which a foreign principal would only be chargeable in respect of his profits on the sale of goods through an agent here in cases where the agent either sells from stock or is empowered to conclude contracts on his principal's behalf, and does in fact habitually exercise that power as part of the normal course of business.

I propose in the Finance Bill to seek powers to take preparatory steps in the current year for a new assessment of all property in Great Britain for Income Tax Schedule A. This will come into force next year, and will include the Metropolis. In the Metropolis, valuations for Schedule A are linked up and dependent on the valuations made for purposes of rating. I propose to alter this, and to provide for a separate valuation for Schedule A, as distinct from the rating valuation, thus bringing the Metropolis into line with the rest of the country. The last reassessment related to the year 1923–24, so that a new assessment is now fully due, and I propose that as from 1931–32 onwards, the reassessment shall take place automatically at quinquennial periods.

The Finance Bill will contain several minor provisions amending the Inland Revenue laws, generally to deal with points of hardship or very slight readjustment. One of them aims at removing the hardship which may occur under the present Income Tax law when a new concern commences business with a very profitable year, and, although the change requires a Resolution, its general effect is in the direction of a concession to the taxpayer.