§ The commissioners of Inland Revenue shall, not later than the thirty-first day of March in each year, prepare and make available for public inspection a register containing a short account of the cases relating to income tax, surtax, national defence contribution and excess profits tax decided by the special commissioners during the twelve months ending on the thirty-first day of December immediately previous, but only in so far as they contain an interpretation of points of law; the short account referred to herein shall not disclose the name of the party or parties to each case, but shall contain sufficient information to enable the question or questions of law involved to be fully understood.—[Commander Galbraith.]
§ Brought up, and read the First time.
§ Commander Galbraith (Glasgow, Pollok)I [beg to move, "That the Clause be read a Second time."
The purpose of this Clause is to provide for the publication of a register containing a short account of cases decided by the Special Commissioners and, in spite of what was said during the Debate yesterday, the Special Commissioners are 2170 a remarkable body of men. They are finely skilled in all matters dealing with taxation law. They spend a large proportion of their time on circuit, hearing and deciding appeals, and they have, accordingly, a very great experience of these matters. Although they are, at the same time, permanent salaried Treasury officials, they show in a scrupulous degree their lack of bias so far as the Inland Revenue is concerned. That was a point which was very forcibly brought out during yesterday's Debate. The decisions of the Special Commissioners are of a very high legal quality, and, indeed, the courts have on numerous occasions gone out of their way to say in what high regard they hold these decisions. No notices of these decisions are published, however, except in the relatively few cases which go to the courts. The inspector of taxes, the taxpayer and those professional men who advise taxpayers are not notified of the nature of the decisions and, in consequence, it seems to me that there is a very great waste of time and effort in settling points which have already been decided by the Special Commissioners and which are constantly being brought up and argued afresh, and even taken to appeal. Had it been known that the Special Commissioners had given a decision on a particular point then no dispute need have arisen.
In these circumstances, I am sure that the Committee will see that the publication of such decisions would be helpful to all concerned. It can be argued that decisions in tax cases depend on the facts of the particular case, and that publication might not be very helpful, but I think we should bear in mind that when a decision has been given on a particular point it shows the trend of the Special Commissioners' opinion and how it might be applied, in the generality of cases while their decisions on principle in connection with particular sections would be of very high value. The Clause is not retrospective. It deals only with the future, but it would be very helpful if, in regard to National Defence Contribution and Excess Profits Tax, the decisions were given from the beginning of the legislation. I am not asking for a similar concession in regard to Income Tax, because the work involved there would be very great indeed, but I would ask my right hon. Friend to consider whether it would be possible to publish the major decisions of the 2171 Commissioners on the question of Income Tax. I do not want this record to be cluttered up with cases which are not of general application, but I do wish it to contain a record of what are essential interpretations of the law as distinct from questions of fact, and that is a matter which, I think, can well be left to the discretion of the Commissioners.
§ Mr. Benson (Chesterfield)If I remember rightly, the Board of Inland Revenue used to publish a series of Income Tax cases of special interest in their annual report, but of late years this practice has been dropped. I forget exactly what cases they chose for publication, but they used to give a small summary in the report. I certainly think that hon. Members would find such a summary interesting and, therefore, I hope that the practice suggested by the hon. and gallant Member in this Clause will be adopted.
§ Sir Adam Maitland (Faversham)May I be permitted, in a few words, to support the Clause which has been proposed by my hon. and gallant Friend? I think there may be difficulties, but it is a matter about which practising accountants have made representations for some considerable time, and I would like to submit a point for the consideration of the Chancellor of the Exchequer. In a number of cases the law is interpreted by the Inland Revenue authorities in a certain way, and I think there is a great deal to be said, for the sake of equity, for those interpretations being conveyed to taxpayers generally. In the old days, the Income Tax inspector regarded himself not so much as a collector of taxes as the medium through which the taxpayer would be informed how the law operated and whether any concessions were available. I am sorry to say that this function of the tax inspector—possibly owing to the difference in the rate of tax—has ceased to exist, but I believe the need for it is as great as ever, especially as the taxation now levied is at such a high rate. Therefore, I hope the Chancellor of the Exchequer will see his way although not necessarily in this form, to accept the suggestion to give information, to the taxpayer which, in all reasonableness, he is entitled to have.
§ The Solicitor-General (Major Sir David Maxwell-Fyfe)Before I deal with the 2172 main point raised by my hon. and gallant Friend the Member for Pollok (Commander Galbraith), I should like to answer the point raised by my hon. Friend the Member for Chesterfield (Mr. Benson). The reported cases were those dealt with in the High Court and not those taken to the Special Commissioners, and, although we shall pay attention to his wishes, I wanted to indicate to him that was a different principle from that raised by my hon. and gallant Friend. I have every sympathy with the desire expressed for the greatest possible publicity, but I am afraid that practical difficulties prevent the acceptance of this suggestion. The Special Commissioners are, if I may underline the opinion expressed by my hon. and gallant Friend, worthy of every tribute paid to them, but, of course, in the Income Tax structure, they are, except for one or two special matters like Surtax and the question of direction, in exactly the same position as all the other bodies of general Commissioners which operate throughout the country. The jurisdiction is co-ordinated and the Special Commissioners have no pre-eminent position in law. Therefore, if the decision of Special Commissioners were quoted, one would be in the difficulty that such decisions would not be binding and, on the other hand, if they were quoted with the authority of a statutory enactment behind them, it would be very difficult for the various bodies of commissioners to distinguish between them and a binding authority.
That is the first point, and I think it is a point of difficulty with regard to practice. A second difference is one which my hon. and gallant Friend fully realised himself, and I would like him to consider it again. He asks for a short report, but if it is a short report, these must be something in the nature—if I may give an example which he in his professional capacity will realise—of notes in the tax cases. Headnotes are absolutely hopeless as a guide to another tribunal. Until one gets into the facts of a case, and know on what point the actual decision was based and what weight was given to the different sets of circumstances, the authority decided by one court does not really help another. In my view—and I suppose few people have had to consider more reports of taxation cases than I have during the past two and a half years—it would be of very little help unless we were to get out complete reports, as is done in 2173 the Tax Cases and in the Law Reports and that would be a great strain, apart from the difficulties which I have already set out on the first point.
I would remind my hon. and gallant Friend that, in addition to the tax cases, there are the cases in the High Court. When these cases have finished their progress, either to the High Court, the Court of Appeal or the House of Lords, or wherever they may end, we do issue leaflets which give considerable and immediate guidance upon the important points of law. It is very rare, in my experience, to find a point of law on which the taxpayer and those advising him really require guidance which does not find its way into the High Court within a very short time. I hope, therefore, that my hon. and gallant Friend will realise that I do sympathise with the intention behind his point, but that I am afraid the Inland Revenue authorities could not deal with this matter, and that the result would not have the practical benefit which he hopes for. Therefore, I ask him, not to press the new Clause.
§ Commander GalbraithI wish to thank my hon. and learned Friend for the reply he has just given. Naturally, I am disappointed. I hope he appreciates that this matter is one which the whole profession of accountants, at least, have very much at heart. Notwithstanding what he has said, they feel that a very great benefit would be derived by the taxpayer and by everyone connected with taxation matters if it were possible to publish even a number of the more important decisions given. I hope that, in spite of his reply, further consideration may be given to this matter. I have no hesitation in asking leave to with draw the Motion.
§ Motion and Clause, by leave, withdrawn.