§ Rule 13 of the Rules applicable to Cases I and II of Schedule D (which provides for the set off of losses against profits where a person carries on two or more distinct trades) shall have effect as if any reference therein to a trade included a reference to a profession or vocation.—[Captain Crookshank]
§ Brought up, and read the First time.
§ Captain Crookshank
I beg to move, "That the Clause be read a Second time"
This new Clause is in substitution for an Amendment which was proposed during the Committee stage by the hon. 1234 Member for East Middlesbrough (Mr. A. Edwards) and afterwards withdrawn. At present Rule 13 of the Rules applicable to Cases 1 and 11of Schedule D deal only with cases in which the Income Tax payer is carrying on two or more distinct trades. My hon. Friend sought to extend it to the case of a man who was carrying on a trade or more than one trade, and also a profession. The object of the new Clause is to bring a case of that sort into line with the case of the Income Tax payer who is carrying on two businesses. The reason why there was ever any distinction is wrapped in the mystery of time. There is no logic in it and it probably arises from the fact that in the far-off days when Income Tax began, there were comparatively few cases of a profession and a trade Being carried on simultaneously by an individual. Times have changed, however, and nowadays an ordinary business man may well be engaged in what is, for Income Tax purposes, considered to be professional work. My hon. Friend made out a perfectly good case in Committee for his point, but I could not accept his Amendment at that stage, because it was not right in its drafting. I hope he will agree that the new Clause carries out his intention.
§ Mr. A. Edwards (Middlesbrough East)
As the law stood in this respect the professional men did seem to be unjustly treated and the right hon. and gallant Gentleman's acceptance of my proposal, in this form, will be greatly appreciated. These are cases which do not often arise but I think it is true that they arise rather more frequently at the present time than they did formerly. I am glad, therefore, that the right hon. and gallant Gentleman has seen fit to bring such cases into line with the other cases to which the Rule relates.
§ Mr. Pethick-Lawrence (Edinburgh, East)
I am glad that the right hon. and gallant Gentleman has seen his way to put this matter right by giving to professional men the relief under this head which applies to men engaged in business and placing all on the same footing. I would however add this reminder to the Chancellor of the Exchequer. I am, by no means, making any general accusation but there is one way by which some professional men do escape their due share of taxation. Money often comes to them in the form of cash payments. They put 1235 the cash into a pocket and when they have to meet some little expense, they do so out of that pocket or some other pocket, and they forget, rather conveniently, that this money is really income which ought to be accounted for to the Inland Revenue authorities. Out of every pound of such money 10s. should be set aside for payment to the Chancellor of the Exchequer, before the other 10s. is paid out possibly for some personal gratification. But I fear that all do not remember that fact. I take this opportunity of reminding the right hon. Gentleman of the leak which exists in this respect. It affects doctors, dentists and other classes of people. The right hon. Gentleman might look into the point to see whether some method cannot be devised of bringing home to such people their obligations to the Exchequer.
§ Question put, and agreed to.
§ Clause read a Second time, and added to the Bill.