HC Deb 17 July 1930 vol 241 cc1618-21
Sir H. BUCKINGHAM

I beg to move, in page 12, line 39, after the word "months." to insert the words: ending on a date within the year preceding the year of assessment. These words have the effect of limiting the period at which the Inland Revenue authorities can fix the accounting date under this Clause. As I understand that the Amendment is to be accepted, I formally move it.

Lieut.-Colonel Sir G. DALRYMPLE-WHITE

I beg to second the Amendment.

Amendment agreed to.

CLAUSE 14.—(Provision as to computation of profits and gains for purpose of charge to tax in two years next after the year in which trade, etc., set up or commenced.)

Captain BOURNE

I beg to move, in page 13, line 10, at the end, to insert the words: and the expression 'person charged' means a person who is a partner in a firm charged. This Clause is a rather complicated one. It deals with Income Tax assessed upon profits, and the object is to make it perfectly clear that when the original charge is made upon a firm, in the case of a partner who resigns during one of the three years of assessment, he is not to be held liable because his partners subsequently, after he has retired from the firm and has no longer any interest or voice in its management, elect to alter the basis of assessment which they are entitled to have under the Clause. The whole object is to protect an individual who has ceased to have any voice in the management, and who, therefore, might find himself in a worse position should his partner, after retirement, decide to go back to another form of assessment.

Mr. A. M. SAMUEL

I beg to second the Amendment.

Mr. P. SNOWDEN

This Clause gives relief to new businesses in the second and third year of assessment. As the hon. and gallant Member who moved the Amendment has said, it is a very complicated matter, and one which needs some explanation. I think these who have put down the Amendment have not apprehended what would be the effect of it in the wording in which it appears on the Order Paper. It clearly cannot be the intention of the mover of the Amendment to confine the benefits of the Clause to partnerships, and that, I am advised, would be the effect of the Amendment as it stands. I rather gathered from what the hon. and gallant Gentleman said that that was not the intention, but that it was intended to protect the individual who was in a partnership against any dispute he might have, or any action detrimental to himself that might be taken by his partner in the business. Another effect of the Amendment would be that a partner who claimed under this Amendment would be placed in a different position from the other partners in the firms and, therefore, by guarding against the danger the hon. and gallant Member is anxious to guard against, it would create a similar injustice against the other partners. I think it would be very much better to leave the position as it is now, because if the Amendment were accepted it would only add confusion.

Sir A. STEEL-MAITLAND

The Chancellor of the Exchequer, on the Committee stage said, if I remember rightly, that he would look into this and see whether it could be made clearer on the Report stage. I do not know whether he has done so or what the result is.

Mr. SNOWDEN

That is quite true, but I do not think I said it because, if I remember rightly, the Attorney-General was in charge of the Clause. He did give an undertaking that he would look into certain points which had been raised, and the Committee will find the results of his investigations in the numerous Amendments on the Order Paper. The Attorney-General has endeavoured in these Amendments to meet the points that were raised in the course of the Committee stage.

Captain BOURNE

In view of what the Chancellor has said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. P. SNOWDEN

I beg to move, in page 13, line 11, to leave out the words "for the second year of assessment," and to insert instead thereof the words, "or liable to be charged."

Captain BOURNE

I realise that the Chancellor has gone a very long way towards meeting some of the points raised in the Committee stage. Perhaps he will explain just how far this Amendment meets the particular point raised in my Amendment. As far as I can make out it does give some protection in cases where the partnership has elected to be charged under the provisions of this Clause. One of the partners dies, and subsequently the remaining partners give notice that they do not desire to remain under the assessment. I think it protects the individual who is no longer in a position to speak for the firm, and as far as I can make out he has only to signature his desire in writing. I shall be grateful if the Parliamentary Secretary will give us a slightly fuller explanation.

Mr. PETHICK-LAWRENCE

The effect is this. Under the Clause as it stood there was a danger that a different set of persons might come in and the option could be used to the disadvantage of the men who had gone out in favour of the men who had come in. The effect of the Amendment is that all the parties concerned must agree to the change in order to make it valid. In this way the second year partner is protected as against the third year partner.

Amendment agreed to.

Further Amendments made: In page 13, line 13, leave out the words "twelve months," and insert instead thereof the words "two years."

In line 14, after the word "year" insert the words "of assessment."

In line 19, leave out from the word "that" to the word "may," in line 20, and insert instead thereof the word "he."

In line 22, leave out the words "that year," and insert instead thereof the words "the third year of assessment."

In line 23, leave out the words "given by the person charged for the second year."

In line 27, leave out Sub-section (3), and insert instead thereof the words: (3) If at any time during the second or third year of assessment, any such change as is mentioned in paragraph (1) of Rule 11 of the Rules applicable to Cases I and II of Schedule D occurs in the persons engaged in the trade, profession, or vocation, a notice for the purposes of the last preceding sub-section or of the proviso thereto, must, if given after the occurrence of the change,—

  1. (a) in the case of a notice given within twelve months after the end of the second year of assessment, be signed by each of the persons who were engaged in the trade, profession, or vocation, at any time between the commencement of the second year of assessment and the giving of the notice, or, in the case of a deceased person, by his legal representatives; and
  2. (b) in the case of a notice given after the end of the third year of assessment, be signed by each of the persons who were engaged in the trade, profession, of vocation, at any time during the second or third year of assessment, or, in the case of a deceased person, by his legal representatives."—[Mr. P. Snowden.]