HC Deb 20 February 1940 vol 357 cc1140-3
49. Sir Frank Sanderson

asked the Chancellor of the Exchequer his estimates of the amount payable by persons with annual incomes of £5,000, £10,000, £20,000 and £50,000, respectively, in Income Tax, Surtax and insurance to cover Estate Duty, based on the calculation made by the Colwyn Committee on National Debt and Taxation, if the taxpayer derives all his income from investments, and if the taxpayer derives half his income from investments and half from earnings, respectively, in the years 1913, 1923, 1933 and 1940?

Sir J. Simon

I will, with my hon. Friend's permission, circulate in the OFFICIAL REPORT a table giving the information desired.

Sir F. Sanderson

Can the Chancellor of the Exchequer say whether in the case of larger incomes that Income Tax, Surtax and insurances for Estate Duty do in fact absorb the whole of the income, and that therefore these persons are in fact living on their capital?

Sir J. Simon

If the hon. Member will look at the tables he will see how far his conclusions are correct.

Following is the table:

The following table shows, for the years 1913–14, 1923–24, 1933–34 and 1940–41, the Income Tax and Surtax (or Super Tax) payable on the incomes in question, together with the net annual payment required to meet the Estate Duty on death. The table is on the basis adopted in their Report by the Colwyn Committee on National Debt and Taxation, investment income being capitalised on a 5 per cent, basis and the taxpayer being assumed to be a married man, aged 45, with three children.
Year Total Income. All Investment Income. Half Earned Income and Half Investment Income.
Equivalent Capital Income Tax Surtax (or Super Tax) Net Insurance payment to provide for Estate Duty. Total. Equivalent Capital. Income Tax. Surtax (or Super Tax). Net Insurance payment to provide for Estate Duty. Total.
£ £ £ £ £ £ £ 4 £ £ £
1913–14 … … … 5,000 100,000 292 — 298 590 50,000 292 — 113 405
10,000 200,000 583 175 725 1,483 100,000 583 175 290 1,048
20,000 400,000 1,167 425 1,600 3,192 200,000 1,167 425 725 2,317
50,000 1,000,000 2,917 1,175 5,176 9,268 500,000 2,917 1,175 2,000 6,092
1923–24 … … … 5,000 100,000 1,029 362 501 1,892 50,000 984 302 176 1,522
10,000 200,000 2,154 1,462 1,420 5,036 100,000 2,109 1,462 501 4,072
20,000 400,000 4,404 3,962 4,122 12,488 200,000 4,359 3,902 1,420 9,741
50,000 1,000,000 11,154 12,712 14,121 37,987 500,000 11,109 12,712 5,252 29,073
1933–34 … … … 5,000 100,000 1,158 337 733 2,228 50,000 1,083 337 247 1,667
10,000 200,000 2,408 1,519 2,099 6,026 100,000 2,333 1,519 732 4,584
20,000 400,000 4,908 4,682 6,258 15,848 200,000 4,833 4,682 2,019 11,534
50,000 1,000,000 12,408 15,957 23,231 51,596 500,000 12,333 15,957 8,050 36,340
1940–41 … … … 5.000 100,000 1,724 369 908 3,001 50,000 1,630 369 286 2,285
10,000 200,000 3,599 1,706 3,025 8,330 100,000 3,506 1,706 865 6,077
20,000 400,000 7,349 5,706 8,400 21,455 200,000 7,256 5,706 2,712 15,674
50,000 1,000,000 18,599 19,706 42,938 81,243 500,000 18,506 19,706 10,871 49,083

55 Sir F. Sanderson

asked the Chancellor of the Exchequer whether owing to the increased taxation, and the complexity of the method of arriving at the amount which is subject to direct taxation, necessitating the professional services of accountants, and, as it is to the advantage of both the Treasury and the taxpayer that the amount subject to taxation should be accurate, he will consider between now and the next Budget allowing the deduction of accountants' fees before arriving at the net taxable income?

Sir J. Simon

I must refer my hon. Friend to my answer given to him on 14th December last.

Sir F. Sanderson

Does not the right hon. Gentleman consider that these current expenses are really charges against income, and will he not re-consider the position between now and the next Budget?

Sir J. Simon

I will give proper consideration to any serious suggestion put forward, but as at present advised I do not think that I can agree with the hon. Member.