HC Deb 21 March 1944 vol 398 cc669-70
53. Sir Stanley Reed

asked the Chancellor of the Exchequer whether, when disability benefits are received by a tax payer for a continuous period, exceeding 12 months under an insurance policy taken out to cover sickness or accident, it is the practice of the Inland Revenue Department to raise income tax assessments after that period, in full, and with out any deduction for expenses necessarily incurred by reason of the disability.

Sir J. Anderson

Continuing benefit paid under an insurance policy during disablement through accident or sickness is assessable to Income Tax without deduction for expenses incurred by reason of the disability. With regard to the expenses I would refer my hon. Friend to my reply of 1st February to the hon. Member for Bridgwater (Mr. Bartlett) of which I am sending him a copy.

Sir S. Reed

Seeing that payments for wound disability benefits paid out of public money are exempt from tax, is it equitable to penalise those who make provision for disability by thrift and foresight?

Sir J. Anderson

The House has thought fit to make special provision in that regard for the victims of war injuries. For Income Tax purposes a broad distinction has always been made between expenses necessarily incurred in earning the income and expenses to which the income, when earned, is applied.

Sir H. Williams

Surely, if the income resulting from an insurance policy is taxed, the premiums ought to be exempt from taxation. Will my right hon. Friend give the proper concession to make the arrangement a fair one?

Sir J. Anderson

I agree that there is a point in that question.