Clause 17. — (Extension to 1945 –46 of s.11 of Finance (No.2) Act, 1939.) (Hansard, 28 November 1945)

§ Captain Crookshank
What is this Clause all about? It looks a very little thing, and it may be common form but —(Interruption.) I am sorry, but if a Clause is as complicated-looking as this is, and one which an ordinary person cannot understand, it seems to me that, if I should courteously ask if there is anything in it, the Committee should be prepared to hear the reply.

§ Mr. Glenvil Hall
I should explain that this Clause has appeared in a previous Finance Bill, and that all we are doing now is to continue an arrangement come to in the early days of the war. This dealt chiefly with the case where a man went into the Forces and had his income suddenly and drastically reduced, as in the case of a man going from an office job into the Army on a soldier's pay, and before P.A.Y.E. came in. That man would have been assessed on his income for the previous year, and, unfortunately for him, would be paying Income Tax on the previous year's income out of his soldier's pay, and that, clearly, became difficult to do. I put it no higher or lower than that, and it was decided that, where his income suffered —went down, I think, by four-fifths, although I have forgotten the exact percentage —he could go to the Income Tax inspector and an adjustment could be made, and he could then have his income assessed on his actual income for the year and not on his income for the previous year, on which normally, under Schedule E, he would have had his assessment made.

§ Captain Crookshank
1 am much obliged to the Financial Secretary, and I am sure the Committee is as well, including the hon. Member who said he did not understand it.[Interruption.]It is quite clear from what the hon. Gentleman has said that what I thought actually is the case, and that, where there was a big diminution of income on a man being called up, this arrangement was made. What puzzled me was why it still occurred when we have already gone over to the new system and have collected current amounts from so many people in discharge of their obligations in respect of Income Tax.

§ Mr. Glenvil Hall
I am sorry, but I should have covered that point, too. The short answer is, that not every one who goes into the Forces even now is under Schedule E, and, as the right hon. and gallant Gentleman knows, some people are still assessed under other Schedules, such as Schedule D, and it is to enable those cases to be dealt with by the Inland Revenue in a legal way that this arrangement was made.

§ Sir W. Darling
Could the Financial Secretary help me in regard to a difficulty? This concerns a man who has left his work to become a soldier. Has the inverse process been taken care of? I have in mind the case of a visitor whom I received yesterday, a lieut.-colonel at £900 a year, who is returning to a post, and is quite happy to take it, where his income will be £250 a year, on which he will pay Income Tax on the income of the previous year.