§ 48. Sir W. DAVISONasked the Chancellor of the Exchequer whether his attention has been drawn to a recent decision of the High Court to the effect that the costs which a taxpayer had incurred in connection with an Income Tax appeal cannot be treated as a deductable expense in arriving at his profits for Income Tax purposes; whether he is aware that the taxpayer in the case referred to, though successful on appeal before the Income Tax Commissioners, was as the result of the High Court decision mulcted in costs; and whether steps can be taken to relieve a taxpayer of the payment of costs in any event where such taxpayer has been successful on appeal before the General or Special Commissioners and the case has been taken to the High Court on the application of the revenue authorities?
§ The FINANCIAL SECRETARY to the TREASURY (Major Elliot)I am aware of the case to which my hon. Friend refers. The decision of the High Court on the question at issue confirmed the established practice with which the Income Tax Commissioners' decision did not accord, and my right hon. Friend can see nothing in the circumstances of the case which would support a proposal for an alteration in the existing position in regard to the costs of appeals to the Courts.
§ Sir W. DAVISONIs my right hon. and gallant Friend aware that the Income Tax Commission in their report definitely drew attention to the hardship of the taxpayer having to decide doubtful points of Income Tax law and expressly recommended that, where the taxpayer had been successful, in the High Court if the Inland Revenue authorities appealed against that decision, they should bear the costs of both sides?
§ Major ELLIOTMy right hon. Friend the Chancellor of the Exchequer has to have regard to the interests of the taxpayers who do not appeal, as well as to the interests of those who do.
§ Mr. MACQUISTENIs not that appeal on behalf of all the taxpayers?
§ Major ELLIOTNot at all.