HC Deb 23 March 1944 vol 398 cc1048-50
64. Mr. Liddall

asked the Chancellor of the Exchequer whether, under Pay-as-you-Earn, all Southern Irishmen in this country have been served by the Inland Revenue Commissioners with code numbers.

Sir J. Anderson

Notices of coding have been sent to all employees, without distinction who are known to the Inland Revenue to be earning over £2 a week. If an employer pays over £2 a week to any employee for whom no code number has been notified to him, he is required under "Pay-as-you-Earn" to inform the tax office at once and, pending further instructions, to deduct tax in accordance with the code applicable to a single man without dependants.

Mr. Liddall

Does that mean that it is now definite that Irish labourers, say in Lincolnshire, for instance, will be treated as residents and taxed for Pay-as-you-earn?

Sir J. Anderson

No, that is not the effect of the law, but where no notification to the contrary is received, it will be the duty of the employer to make deductions, subject to whatever readjustment may be necessary at a later stage.

Mr. Shinwell

Would the right hon. Gentleman clarify the position a little? Are we to understand from his statement that citizens of Eire in this country can escape taxation? Is that what he is suggesting?

Sir J. Anderson

I was only referring to the state of the law. It is a fact that citizens of Eire temporarily resident in this country are left to be taxed by the Government of Eire and not by this country, under an agreement between the two Governments.

Mr. Shinwell

What is meant by temporary residence here? What is the definition?

Sir J. Anderson

I am only concerned to try to make clear the actual position under the law. Under the residence agreement which has been entered into between this country and Eire, a person resident in Eire and not resident in the United Kingdom would not be liable to United Kingdom Income Tax on income from United Kingdom sources. If a labourer from Eire is not resident here, for example, if he spends less than six months here in the Income Tax year—that is the ordinary definition of residence for Income Tax purposes—he is not liable to tax. Nevertheless, tax will be deducted in such a case, and relief will be given by way of repayment.

Mr. George Griffiths

Is it not a fact that a lot of the Irish labourers see that they go back inside six months and then come back again? Cannot the right hon. Gentleman stop that?

Mr. Dermot Campbell

Is it not a fact that officers of His Majesty's Services normally resident in Eire have to pay Income Tax both in Eire and in this country?

Sir J. Anderson

As the House, I think, knows, there is an agreement about the over-lapping liability with regard to Income Tax As to the particular case on which I was questioned, I was merely endeavouring to inform the House accurately on the present state of the law. I was not being argumentative.

Professor Savory

May I ask my right hon. Friend to state what is the corresponding position of workmen from Northern Ireland?

Sir J. Anderson

Workmen from Northern Ireland belong to the United Kingdom, which is one fiscal unit.

Mr. Molson

When was this agreement entered into, and when can it be denounced; and will my right hon. Friend denounce it?

Sir J. Anderson

Perhaps my hon. Friend will put a Question on the Paper. The agreement was not entered into in my time.

Mr. Molson

I am very glad to hear that.