EXTENSION OF TIME FOR MAKING ASSESSMENTS IN CERTAIN CASES (Hansard, 31 October 1945)

§ Captain Crookshank
I hope we can have some idea from the Government of what they have in mind here about the extent of time. How long?

§ Mr. Marlowe
I would like to ask a question about this. It appears to accept the principle of opening matters which are already settled, and I have always understood that that is not a principle which commended itself to the Treasury. I remember having some correspondence with the Treasury some months ago on 497 an analogous matter, and the way they defeated me on my point was that they said it would result in opening up settled accounts. I thought it was rather a good point, and I gave way and did not continue the argument. This now appears to be the very opposite case, and it appears that, as usual with the Treasury, they win either way. I would like an explanation of what principle is involved here.

§ The Solicitor-General
The Bill proposes to introduce machinery to enable persons to apply for adjustments of E.P.T. and National Defence Contribution liability without limit of time. In as much as anything which is repaid to them in respect of their liability will fall to come into their accounts as a trading receipt, the Treasury would be a loser if there were not also powers enabling them to reconsider the Income Tax assessments as and when those receipts come into the accounts of the trader. No doubt the House is aware that, at the present time, the limit is six years, and, in the case of estates of deceased persons, three years. It is proposed to extend that period to be co-terminus with the period which may elapse while operations for adjustment of E.P.T. and National Defence Contribution liability can be entertained, so that the answer which the Government make is that it is intended, with regard to Excess Profits Tax liability and National Defence Contribution liability, to extend the time, at any rate for the moment, without limit, during which taxpayers can apply to readjust their liability in respect of these two taxes. That also involves, as a matter of necessary logic, that there should be an equal extension with regard to the adjustment of Income Tax consequential on the adjustment of E.P.T. and National Defence Contribution liability. In other words, there is no limit to the time which is proposed for these applications.