WAYS AND MEANS (Hansard, 28 January 1947)

§ The Minister of Agriculture (Mr. Thomas Williams)
I beg to move, That, where under any Act of the present Session to make further provision for agriculture the Minister of Agriculture and Fisheries takes possession of land for the purpose of farming it, the enactments relating to income tax and land tax shall apply to payments in respect of the land made by the said Minister or a person to whom he has entrusted the farming thereof, as if the Minister or the said person were a tenant, the recipient of the payments were the lessor, and the payments were rent. I rise at once to explain this Resolution so that I shall not be charged- a second time with having failed in my duty. Clause 18 (7) deals with the legistion on taxes. Subsection (7) enables the Minister to take possession of land where no other arrangements are being made for working it. Where the Minister is in possession and, for the time being, is neither owner nor tenant in the generally understood sense, the enactment relating to deduction of Income Tax and Land Tax from rent, and the taxation of excess rents, could not apply. Therefore, this Subsection provides that they shall apply as if the Minister were a tenant, or was the owner. Where another person is entrusted with the land by the Minister as the tenant of the Minister, in such a case, the tenant would have to pay the tax to the Board of Inland Revenue. He could then deduct the amount of tax from the rent, and the Minister would have to pay the landowner the rent, and he also could deduct from the landowner the amount paid in tax. It is quite a normal thing to do. We are merely making proper arrangements.

§ Mr. Turton (Thirsk and Malton)
The difficulty is that the Minister has confined his explanation to Clause 18, but of course, the Minister is taking possession of land under many other Clauses of this Bill. He is also letting the land to tenants. What will be the position in 897 those cases? There will be some cases under Clause 18 where the tenant will pay tax to the Minister and lessor, and other cases where he-will not do so. There will be cases where the Minister himself is farming land. Will the Minister in that case pay Schedule A and Schedule B tax on the land, so that it will appear on the accounts as the tax payments of an ordinary farmer? If so, is that covered by this Ways and Means Resolution; and, if not, why not? It is vitally important that these accounts should be published showing tax liabilities. I should have thought it a little difficult if the Minister is to be in exactly the same position as the lessor for Income Tax, because, after all, there is a position under Income Tax law where the landlord does not pay Schedule A tax, and then the tenant is liable, and the reverse equally applies. What is to occur when the Minister is either landlord or tenant? It is going to be extremely burdensome for the wretched farmer if he is a tenant of the Minister and finds himself suddenly distrained on for Income Tax because the Minister, having had rather a busy day, has forgotten to pay the tax to the Chancellor of the Exchequer. That is the kind of thing about which we want to be very careful.

§ Mr. Alpass (Thornbury)
The tenant has the right to claim from the Minister.

§ Mr. Turton
We are dealing here with an additional position. If the Minister, as landlord, forgets to pay his Schedule A tax, then, under the Income Tax law, the Crown can come against the tenant for the tax. It is very harsh if the tenant suddenly finds himself in the position of having paid rent and not having deducted tax on which he is to be distrained.

§ Viscount Hinchingbrooke (Dorset, Southern)
It is perfectly clear that this Resolution is the first chapter in the "Alice in Wonderland" of the Socialist State. The final chapter will be when the Government owns all the industries and all the land, and pays all the taxes to itself. Then nobody else will be bothered.

§ Mr. T. Williams
I do not think there is any mystery about this Subsection. It is perfectly clear. A variety of things are likely to happen if the Minister through the county executive committee is obliged to take possession of a farm. It may be that he will be in possession for a week 898 or two, until a tenant can be provided. If the Minister finds a tenant, ultimately the tenant will have to pay the tax, but he will deduct the tax from the next payment of rent to the Minister, who at the moment is responsible to the owner. The Minister will then pay to the owner the rent due to him less tax. I cannot see the possibility of any complication arising under that provision. I do not know whether I have made myself clear—shall I try again? If for a moment there is a change, as a result of a dispossession, arrangements have to be made for Income Tax to be paid. This Subsection, which is very clearly drawn and not subject to any complication, is designed to enable. Income Tax to be paid in the proper way.

§ Mr. Turton
That is not the point. It is reasonably clear, but not abundantly clear under Clause 18. But there are many other provisions in this Bill under which the Minister will be managing and farming land. What is required is a broad picture of Income Tax law in relation to the Minister in his farming operations.

§ Mr. T. Williams
Under any other provision of the Bill, where the Minister takes the place of the owner, the Minister will have to fulfil the obligations of the owner. That, surely, is clear? Where the Ministry finds a tenant, who takes possession, then the ordinary obligation of a tenant will fall on the new tenant.

§ Mr. York (Ripon)
This deals with one of the points I had intended to make on the Financial Resolution, and I think on this question I am perfectly entitled, subject to your correction, Major Milner, to review the question of Ministry accounting on this Resolution.

§ The Chairman
I do not see how any of these questions can arise at this stage.

§ Mr. York
I am sorry, but I am not trying to discuss a wide issue here. At the same time, I do want an explanation on one point. If the occupier—I refer to occupation rather than ownership of a farm—is an individual—[An HON. MEMBER: "It might be twins."]—I would point out that I am using the term generically. If it' is an individual, his accounts would be presented under Schedule D, presuming that the Schedule A value was over £100. If the possessor 899 is the Ministry of Agriculture, or the Land Commission, or the county agricultural committee, will those bodies have to submit accounts under Schedule D and will they be taxed on that assessment?

§ Mr. T. Williams
That question has nothing to do with this Resolution in Committee of Ways and Means.

§ Mr. York
Oh, yes, it has.