HC Deb 10 December 1945 vol 417 cc72-5

A person who has actually resided in the United Kingdom at one time or several times for a period equal in the whole to six months or longer in any year of assessment shall not be chargeable to tax under Rule 2 of the Miscellaneous Rules applicable to Schedule D of the Income Tax Act, 1918, for that year if such residence shall be due to circumstances arising out of the present war and shall be for some temporary purpose only and not with any view or intent of establishing his residence therein. — (Sir A. Gridley.)

Brought up, and read the First time.

Sir Arnold Gridley (Stockport)

I beg to move, "That the Clause be read a Second time."

It is with your assent, Mr. Deputy-Speaker, and having given notice to the Chancellor of the Exchequer, that I am moving the Second Reading of this new Clause which is not on the Paper. The function of the Clause is really to deal with a very special case of what may be very serious financial hardship. If I may take Malaya as an example, there are a great many people in managerial and staff positions in the service of tin-mining companies, rubber estates and trading businesses, civil servants and so on, who for over three and a half years were prisoners of war in the hands of the Japanese, and many of whom have suffered grievously. Happily, a large number have been rescued and are now back in this country, but they may be in this position. In ordinary times, a man serving in a foreign country may have six months' home leave every two or three years. If he stays in this country for more than six months, his salary is liable to Income Tax deduction. The result is that most people who have six months' leave spend a part of the time out of the country so that they are not involved in Income Tax liability. In present circumstances, arising out of the war, a great many of these people, now at home, may be compelled, for medical reasons, to stay for a longer period than six months. I know of cases where doctors have said that they should remain here for nine months or a year before they would be really fit to go back again. It would be a great additional hardship, on top of all that they have already suffered, if they were to be financially hit by the operation of a tax which was not intended to fall upon them in circumstances such as those that I have described.

Most of them have lost their all, and such moneys as have been accumulated on their behalf by way of income during their incarceration, and which will fall due to be paid to them, will be looked upon as money with which to reinstate themselves when they go back and refurnish their homes. They have not been informed to what extent they might look to the Government or for assistance whereby they might be able to rehabilitate themselves. It is a special case which needs, in justice and fairness, sympathetic consideration, and for that reason I thought it necessary, in the interests of those who have suffered so much on our behalf, to bring this Clause forward. I am sure that the Chancellor will look at it with a sympathetic eye.

Lieut.-Colonel Birch

I beg to second the Motion.

Mr. Dalton

The hon. Member for Stockport (Sir A. Gridley) has handed in this new Clause in manuscript. He has been good enough to furnish me with a typewritten copy of it, but, frankly, I have not had time to consult my advisers fully about it. It will need looking into, and my untutored judgment is that the case which he has made regarding those people who have been prisoners of war in Japanese hands and have suffered in health, and with whom we have much sympathy, is not what the new Clause says at all. The new Clause is very much wider than that and says that a person actually resident in the United Kingdom should be subject to relief these are th—e words which are to carry out the definition of the Clause—

if such residence shall be due to circumstances arising out of the present war. That is very much wider than persons suffering as prisoners of war in the hands of the Japanese. I could not think of accepting the Clause. It would open the door to all kinds of argument. People would say that they could not pay Income Tax because they had been residing in this country through circumstances aris- ing out of the war. I do not make any complaints, but, as this new Clause has been produced at very short notice and has not been put upon the Paper, it has not been possible to treat it in the way that proposals of this kind are ordinarily treated and to get the views of our advisers. We are not ready to accept this particular form of words, partly on the grounds of short notice, and partly because it is much wider than is necessary to carry out the purpose which the hon. Gentleman has in mind.

It is not easy in any case to make a special Income Tax relief arrangement for a narrowly denned class of persons who have been prisoners of war and have suffered in health and will have to stay here rather longer than they normally would. It is difficult to define. If I say that I will give an undertaking in this matter, I do not want to be misunderstood; I am rather unhopeful that we can, within the ambit of the Income Tax law, do what the hon. Member wants to do for a class with whom we all sympathise. Before the next Finance Bill —and perhaps the hon. Member might like to communicate with me—we can see what we can do to help them within the fiscal field, but much as I would like to do it, I am rather doubtful whether fiscal arrangements would quite meet the case. I cannot accept, or advise the House to accept, this new Clause now and I hope that the hon. Gentleman will not press it.

Mr. Oliver Stanley

All of us will understand that the right hon. Gentleman could not be expected to give a definite answer on a Clause of this kind which he has only just read, but I hope that he will consider it between now and the Budget of next April. I ask this particularly, because when I was at the Colonial Office, I came across several very hard cases where Colonial servants, who had come back perhaps not even on leave, but for consultation and had been detained beyond the six months through lack of shipping. It was not through any desire of their own but through inability to get out of the country, and they had been asked to pay Income Tax. There were cases of illness where the people were in the final stages of convalescence and had suffered very heavily financially. In several cases the Treasury through administrative action was able to give a great deal of relief, and it may well be that, if the right hon. Gentleman looked at this in regard to some of the precedents, he might find that, if it is not possible to legislate on the matter, he might be able to give a good deal of relief administratively.

Sir A. Gridley

With the leave of the House, I would like to say a further word or two.

Mr. Deputy-Speaker (Mr. Hubert Beaumont)

Does the hon. Member wish to withdraw the Motion?

Sir A. Gridley

I only want to say a word or two.

Mr. Deputy-Speaker

The hon. Member cannot make a second speech.

Colonel J. R. H. Hutchison (Glasgow, Central)

There is one point which strikes me and I hope that I am not presumptuous in suggesting that the Chancellor should examine the point which my hon. Friend the Member for Stockport (Sir A. Gridley) has put. The six months period was intended to be a yardstick by which the Treasury and the Income Tax authorities determined whether a man was really resident in this country or not. Would it not meet the case if a man normally not resident in this country, who was delayed for six months, produced a medical certificate, whatever his occupation was abroad, to show that it was in consequence of ill-health that he had been delayed in this country for six months? Would not that ease the situation?

Mr. Dalton

indicated assent.

Sir A. Gridley

Having regard to what the Chancellor says, namely, that he will look at this matter again between now and the next Finance Bill, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, with-drawn.