§ 79 and 80. Sir Arthur Salter
asked the Chancellor of the Exchequer (1) whether his attention has been called to the growing practice of tax avoidance by Income Tax and especially Surtax payers by means of foreign holding companies; and, as the provisions of the Finance Act, 1936, designed to prevent tax evasion by such means, have proved ineffective, whether he proposes to introduce more effective measures;
(2) whether his attention has been drawn to the number of holding companies in Luxemburg, Lichtenstein, the Swiss cantons, and Monaco, whose purpose is apparently to enable persons subject to English Income Tax and Surtax to avoid payment; and what steps he is taking to deal with the situation?
§ Sir J. Simon
I can assure the hon. Member that the avoidance of taxation by means of holding companies established in other countries is a subject that is kept under close survey. The provisions of Section 18 of the Finance Act, 1936, which were specially directed against avoidance of Income Tax by this means, have generally been found to be effective, but I have these and other provisions of the law relating to avoidance of taxation at present under review, and if I consider that they require any strenthening, I shall not hesitate to ask 548 the House for additional powers to ensure that individuals will not be allowed to escape paying their fair share of the national expenditure.
§ Mr. Neil Maclean
Has the Chancellor of the Exchequer noticed the reference in the second question to English Income Tax and Surtax, and are we to understand from that that no Scotsman pays Income Tax or Surtax, and that those taxes are applicable only to English taxpayers?
§ Mr. Thorne
Why is it that big Income Tax payers can get out of their obligations and little men like myself cannot slip through at all?