HC Deb 07 July 1930 vol 241 cc170-1

The following paragraph shall be added to Schedule A, No. VIII, of the Income Tax Act, 1918:— 12. No claimant for repayment or allowance of tax under this rule shall be entitled to claim or be allowed repayment or allowance of tax unless and until he shall produce to the person from whom he is claiming repayment or allowance a receipt or certificate to prove that he has paid or suffered the tax, repayment, or allowance for which he is claiming.—[Major Hills.]

Brought up, and read the First time.

Major HILLS

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

This Clause deals with a simple but rather important point. A tenant who pays the property tax on his house has the right to deduct the amount of the tax from his rent, the charge being really one upon the landlord. Hitherto there has been no necessity for the tenant to show that he has paid the property tax. In certain cases the tenant has deducted the amount of the tax from the rent without paying the tax, and the landlord has thus lost that part of the rent and had to pay the tax. In the case of a leasehold the loss fell on a man who had sub-let to a sub-tenant. The matter was dealt with two years ago but, unfortunately, not completely, and the ingenuity of certain people has found a way round the safeguards. All I ask in this new Clause is that the tenant who claims the right to deduct the amount of the tax from his rent should be required to produce the receipt for the tax. I believe the words of the Clause are apt for the purpose, and I believe the Chancellor is acquainted with the facts of the case. This is a matter of common justice, and I hope the new Clause will be accepted.

Mr. PETHICK-LAWRENCE

Our view is that this Amendment is not really necessary. The major cases, where the tenant pays tax in the first instance and passes on that payment to the landlord, are already met. So far as we appreciate the point which the hon. and gallant Member has in mind we feel that there is no necessity to make a change. We do not think he has made out a case for the change.

Major HILLS

All I ask is that a flaw which has been discovered in the present procedure should be put right. The courts have decided that a tenant can claim to make the deduction from the rent without having paid the tax, so that the unfortunate landlord has to go short in his rent and pay the tax as well. That being so, surely a Clause like this ought not to be allowed to continue. All I ask is what is the effect of the Clause.

Mr. P. SNOWDEN

This ought to be a matter between the landlord and the tenant. I confess that I cannot call to