§ 16. Mr. Liddallasked the Secretary of State for War whether his attention has been called to the method of deduction of income tax from officers' pay by the Army Pay Department without reference to basic amounts for net liability; whether he is aware that neither basic nor amount tax able is furnished; and whether he will issue orders to stop this deduction, and to ensure that all proper allowances and relief are to be given to every officer, and that the Pay Department should render a statement in each case giving credit for all proper deductions that can be made before tax is leviable before they reduce the amount?
§ Captain MargessonThe arrangements for the deduction of Income Tax from pay of Army officers are based on the provisions of the Income Tax Act. Under that Act the tax is deductible from pay on issue, and in practice the liability for the year is collected in twelve approximately even monthly instalments ending in March. The instalments taken at the beginning of the tax year are provisionally based on tax tables which take into account the personal and family reliefs to which an officer is entitled. These tables are published for the information of the Army. When the individual income return of the officer has been examined and certified, the instalment is revised and he receives a notice of assessment which shows his actual net liability for the year. If any officer feels that the provisional deductions of tax are excessive, his case may be specially considered with a view to an appropriate adjustment.