§ 51. Mr. T. JOHNSTONasked the Chancellor of the Exchequer whether the attention of the Treasury has been drawn to a practice whereby merchants may hire from farmers land carrying growing potatoes, but upon the profits of these transactions neither Income Tax nor Super-tax is paid by the merchants; and whether he proposes to take any steps to prevent this form of tax evasion in the future?
Mr. CHAMBERLAINUnder the provisions of the Income Tax Acts, potato growers are assessable under Schedule B on the annual value of the land they occupy and not upon profits. Where potato growers are also merchants dealing in potatoes, they are further assessable to Income Tax under Schedule D and to Surtax in respect of any profits arising from their merchanting business. Any alteration of the basis of assessment under Schedule B would, of course, necessitate legislation.
§ Mr. JOHNSTONHas the right hon. Gentleman any reason to believe that the sums which escape annually are very considerable?
§ Sir ERNEST SHEPPERSONIs it not a fact that Schedule B is paid by the farmer in these transactions and that Schedule D is paid by the merchant, and that not only is there no evasion of Income Tax, but double Income Tax is paid?
Mr. CHAMBERLAINI understand that the question addressed to me refers to merchants who are also growers.
§ Mr. LIDDALLWill the right hon. Gentleman bear in mind that if the potato grower of this country has any more taxation to bear he soon will not grow potatoes?