Earned Income Tax (Hansard, 17 November 1942)

60. Mr. De la Bère
asked the Chancellor of the Exchequer whether, having regard to the concession granted to taxpayers whereby Income Tax is not to be based on the previous year but on actual amounts received where the total income has been reduced by more than 20 per cent. owing to the war, he will consider dating such concession from the tax deduction period commencing 1st November, 1942, in respect of the year 1942–43, where taxpayers have been very badly affected owing to the spread of the war to the Far East?

§ Sir K. Wood
As my hon. Friend is aware, the law provides that the relief to which he refers is to be given either by reduction of the second instalment of fax or by repayment. In the case of income to which the deduction scheme applies, the second instalment for 1942–43 is deductible from emoluments over the period of six months beginning on 1st May, 1943. In general, it will not be possible to determine whether there is a title to relief for that year until after 5th April, 1943, when the actual earned in-come for the year is known, and it would riot therefore be practicable, as a general rule, to give relief by reduction of the tax deductible from emoluments in the period beginning 1st November, 1942. There may, however, be some cases in which the taxpayer can show that the reduction in his income for the year 1942–43 is likely to be so great as to justify relief which Would reduce his total tax bill below the amount deductible in the November deduction period, and if, in such cases, the full facts are put before the Inland Revenue authorities special arrangements may be made.

§ 62. Sir I. Albery
asked the Chancellor of the Exchequer whether he has considered the Income Tax assessments of workers who have been transferred to other employment where their earnings are considerably less, with the result that their Income Tax payments will fall to be met at a time when their earnings have been reduced owing to Government action; and whether he proposes to remedy this hardship?

§ Sir K. Wood
I would refer my hon. Friend to the reply I gave him on this Question on 20th October.—[OFFICIAL REPORT; col 1837, Vol. 383.]

§ Sir I. Albery
I beg to give notice that I shall move an Amendment on this matter when the Chancellor introduces his Budget.