HC Deb 19 June 1958 vol 589 cc1298-9
27. Sir F. Medlicott

asked the Chancellor of the Exchequer if, in view of the large amounts of Income Tax and Surtax which the revenue loses annually through the bankruptcy, insolvency or disappearance of those liable for the tax, he will examine the possibility of designing a system comparable to Pay-As-You-Earn to be applied to tax due under Schedule D Which is at present payable directly and not by deduction.

The Paymaster-General (Mr. Reginald Maudling)

I am afraid my hon. Friend's suggestion would not be practicable.

Sir F. Medlicott

Is my right hon. Friend aware that some people, especially in the entertainment world, seem to be allowed to build up arrears of tax which would be unthinkable in the case of ordinary workers? Surely, it must be possible to devise an extension of the area over which tax is deducted at source, leaving it to the taxpayer concerned to claim his allowances, as is done by millions of other taxpayers?

Mr. Maudling

Legislation designed to strengthen the hands of the Revenue in dealing with the liabilities of theatrical and other professional people was included in the 1956 Finance Act. It is beginning to have some effect but has not yet had time to have full effect.

Mr. Jay

Is it really impracticable to extend P.A.Y.E. to at least some sections of the entertainment world? Will the right hon. Gentleman think again about this?

Mr. Maudling

This has been examined several times both by the Inland Revenue and by the Royal Commission. It is impossible to have a P.A.Y.E. system when there is no regular employer to make the deduction.

Mr. Shinwell

How does it happen that so many of these entertainers, or so-called or would-be entertainers, manage to escape Income Tax and the discovery is made only after a period of years? Why should they be afforded this privilege?

Mr. Maudling

I ask the right hon. Member to await the full effect of the Finance Act, 1956. A change of that nature, as included in the 1956 Act, is bound to take some time before it can have full effect because of the system of assessment of arrears. I think that it is already making an improvement.