§ Perhaps it would be convenient, before I come to the main items of tax changes in the Budget, to deal first with certain minor matters. There will be a few alterations on the Customs side, arising out of the trade agreements which we entered into at Geneva last autumn. Most of the changes we then undertook to make were, in fact, brought into operation by Treasury Order as from 1st January last. A few cases must, however, be dealt with in the Finance Bill. These relate to a very mixed bag—motor cycles, agricultural tractors, prunes, rice, patent leather, and certain silk and artificial silk manufactures. On most of these matters Budget Resolutions will also be required. These will implement undertakings already published in respect of these goods. Overall, they will involve a very small loss of revenue of about £100,000 in a full year.
§ Next, I propose to abolish the Excise Duty of 8d. a gallon on unsweetened table waters. This, which is mainly a tax on soda water, which I do not drink, now yields only about £150,000 a year, and is not worth the trouble and manpower necessary for its collection. It will be repealed as from 1st May, and the loss this year will be about £100,000. At any rate, we think that very little soda water is drunk neat in this country today. I hope that nobody as a result of this will accuse me of encouraging inflationary tendencies.
§ The legislation governing the Key Industry Duties falls to be renewed this year, and I propose to extend it for another three years. Also, the provision for the stabilisation of the margin of Imperial Preference on sugar expires next August. These margins have been fixed at their present levels since 1926, and I propose to extend the period of stabilisation for a further four years.
§ On the Inland Revenue side, there will be minor changes for the simplification of P.A.Y.E. and for the assessment of farming profits. As regards P.A.Y.E., I propose to make statutory the administrative arrangement, sanctioned by my predecessor, for the abandonment of the checkup assessment. Where the taxpayer's coding is correct and tax has been correctly deducted in accordance with that coding, the liability will be regarded as finally discharged, and no assessment will 63 be made in respect of any slight underpayment that may result. There will also be a change in the measure of relief in respect of life insurance premiums, designed to permit the relief to be accurately allowed for in the coding.
§ So far as farmers are concerned, it is proposed that, with effect from 1949–50, those farmers who still remain assessed under Schedule B on the basis of three times the annual value of the lands they occupy should thereafter be assessed under Schedule D on their profits. With the present system of guaranteed prices, there is no reason why farmers should not—in common with everyone else—pay tax on their true income. Indeed it is a matter of importance both for the nation and for the farmers that accurate and proper accounts of their activities should be available in connection with the review of costs undertaken by the independent economists for the fixation of prices under Part I of the Agriculture Act, 1947, and we believe that this alteration in the method of taxation will help to produce such accounts.
§ There is one other minor matter I propose to deal with in the Finance Bill, for which a Resolution will also be required, and that is to clarify the law as regards the taxation of removable containers on goods vehicles.