§ Rule 13 of the Rules applicable to Cases I and II of Schedule D (which provides for the set-off of losses against profits or gains in distinct trades) shall have effect as if the word "trades" in the said Rule included professions or vocations, and where any person in any profession or vocation has sustained a loss to which the said Rule applies during the previous six years of assessment, he may claim that such loss shall be deducted from or set off againt the amount of any profits or gains on which he is assessed under Schedule D in respect of that profession or vocation—[Mr. A. Edwards.]
§ Brought up, and read the First time.
§ Mr. A. Edwards (Middlesbrough, East)
I beg to move, "That the Clause be read a Second time."
This new Clause is introduced with the object of removing an anomaly under which professional men do not enjoy the same privileges as business men. I do not think it was ever intended that it should be so, but I am advised that that situation arises in connection with Rule 13 of the Rules applicable to cases I and II of Schedule D, which provides for the set off of losses against profits or gains in trades. Decisions have been given which mean that professional men are not supposed to come into this category. It does 764 not say so specifically, but it was ruled that they are not included, and that seems to be an injustice to professional men. If I am running two distinct trades or businesses and I am making a profit on the one and a loss on the other, I am allowed to offset the loss against the profit. A professional man is not allowed to do that. It does not seem to have been intended that the Rule should operate in that way, and it was only when decisions were made that it was seen to penalise certain professional men. I was asked to endeavour to get the anomaly removed. The question is whether they come under trades. It has been ruled that they do not. I think there can hardly be any controversy about this matter. I do not think anybody wants to put professional men in a different category. I hope that the Chancellor will see his way to consider this matter, and if the proposed new Clause is not acceptable in its present form, I hope he will find some way to remove the anomaly.
§ Captain Crookshank
The hon. Gentleman has made out a case. This is really a historical survival, partly, no doubt due to the fact that when the Income Tax laws were originally started a case where a professional man had a trade, or vice versa, was unlikely. I would ask the hon. Gentle- 765 man to leave the matter in the way I suggest. The first part of the proposed new Clause is the important one, down to the word "and" in the third line. It covers the general principle. My right hon. Friend will look into it, with the view to proposing an Amendment upon the Report stage. We have to consider consequential Amendments dealing with Excess Profits Tax, National Defence Contribution and all that part of the taxation. With regard to the latter part of the proposals, we frankly admit that we are not quite sure of its intention. Perhaps when the hon. Gentleman sees our proposal we might discuss the matter further.
§ Mr. Edwards
In view of the statement made by the Financial Secretary to the Treasury, I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.