HC Deb 03 February 1955 vol 536 cc1265-6
40. Sir W. Wakefield

asked the Chancellor of the Exchequer for how many years back tax is being demanded on interest on Post Office savings; why compound interest is charged in some cases and not in others; and the authority for the charging of compound interest.

Mr. H. Brooke

The amount which the Inland Revenue can recover in respect of bank interest omitted from a taxpayer's return depends on the facts of each case. In cases where the omission can be regarded as an innocent oversight, the amount claimed is the actual tax unpaid for six years back, without interest. In other cases, statutory penalties will have been incurred, and in appropriate circumstances it is the practice to require payment of so much of the penalties as will recoup the full loss which has been suffered by the Exchequer; that is, all the tax plus compound interest thereon.

Sir W. Wakefield

Is my hon. Friend aware that domestic difficulties are caused by these inquiries, and that very often a wife has put aside certain savings in the Post Office Savings Bank which she has not disclosed to her husband? The result is that he has not included the interest on them in his return, but he is now required to disclose them. Is not it possible for Post Office savings, within a certain limit, to be exempted from tax?

Mr. Brooke

I recognise that sometimes there may be difficulties. These inquiries have sometimes brought to notice holdings in the Post Office Savings Bank which the persons entitled to them did not even know about.