§ (1) The Commissioners may enter into an agreement with any banker for the composition, in accordance with the following provisions of this section, of the stamp duty chargeable under the heading "Bill of Exchange payable on demand" in the First Schedule to the Stamp Act, 1891, on such instruments—
- (a) drawn on the banker by his customers on forms supplied by him, or
- (b) drawn by the banker on himself or another banker,
§ (2) Any such agreement shall require the banker to deliver to the Commissioners periodical accounts in respect of the instruments to which the agreement relates giving particulars—
- (a) of forms supplied by him to his customers with a view to their being completed and issued as such instruments by the customers, and of forms so supplied but returned unused or spoilt, and
- (b) of such instruments issued by him,
§ (3) Where any such agreement has been made with a banker, any instrument to which the agreement relates and which bears such indication of the payment of stamp duty as the Commissioners may require shall not be chargeable with stamp duty, but the banker shall pay to the Commissioners, on the delivery 306 of any account under the agreement, such sums as would but for the provisions of this section have been chargeable by way of stamp duty on such instruments issued during the period to which the account relates, it being assumed for this purpose that the number of such instruments issued by his customers was equal to the number of forms supplied less the number of forms returned as mentioned in paragraph (a) of the last foregoing subsection.
§ (4) Where a banker makes default in delivering any account required by any such agreement or in paying the duty payable on the delivery of any such account, he shall be liable to a fine not exceeding fifty pounds for any day during which the default continues and shall also be liable to pay to Her Majesty, in addition to the duty, interest thereon at the rate of five per cent. per annum from the date when the default begins.—[Mr. H. Macmillan.]
§ Brought up and read the First time.
§ Mr. H. Macmillan
I beg to move, That the Clause be read a Second time.
The object of the Clause is to make a reform, minor in a sense but not without importance. It is to enable the Commissioners of Inland Revenue to enter into agreements with the banks with the object of improving the present method of collecting Stamp Duty on cheques and dividend warrants.
Under the present law, the 2d. Stamp Duty on cheques, dividend warrants, and so forth, has to be denoted by an impressed, or sometimes an adhesive, stamp. Under the proposed agreements, the banks' printers will print on the cheques a medallion stating that the Stamp Duty has been or will be paid, and the banks will account to the Revenue for the duty payable on the cheques which they supply to their customers or use themselves.
Schemes on this basis are in operation in Australia, New Zealand and South Africa. There will be a substantial saving of work. It is a much simpler system to operate and will mean smaller staffs. Although there will be a period of slight slowing down in respect of the banks accounting to the Revenue for the duty, I think the reform is one that we ought to make, because it brings the whole system into line with modern methods of operation.
§ Mr. Mitchison
I thank the right hon. Gentleman and his right hon. Friend the Financial Secretary for having been kind enough to send my right hon. Friend a note about the practical reasons for the 307 Clause. I can only say that they seem to us to be good reasons.
We hope that the right hon. Gentleman will have a nice medallion to state that Stamp Duty has been or will be paid and will not use it for propaganda of any sort. I do not think that he ought to take this opportunity at any rate of advertising Premium Bonds, and there will not be much room unless it is a very large medallion.
Subject to points of that nature, we agree that this is an improvement, and that it will avoid the horrible picture in his letter of about 600 million cheques a year having to be transported to the Stamp Office. It sounds a bit funny, but it obviously represents a very great deal of unnecessary work. Our go-ahead cousins "down-under" have tumbled to it, and it is about time we did the same.
§ Mr. Bottomley
Can the Chancellor tell us on what basis the penalties have been fixed? Are they in accordance with the practice in Commonwealth countries, or in accordance with another similar matter in the United Kingdom?
§ Mr. H. Macmillan
The penalties follow what has been provided under analogous, although not exactly similar, schemes. I think they are reasonable. I do not think there will be very much difficulty about it. We cannot, of course, operate the scheme except with a very limited number of people. Business firms sometimes ask whether they can operate something of the same kind, but that is not possible. We shall operate it with the clearing banks. Although we have to put in a penalty, I do not think there will be very much likelihood of our having difficulty.
§ Clause read a Second time and added to the Bill.