§ 9. Mr. Swingler
asked the Chancellor of the Exchequer if he is aware of the concern of those citizens from whose post-war credits deductions are being made on account of alleged arrears of Income Tax; and if he will take steps to stop this practice in cases where it can be shown that the Inland Revenue failed to issue revised certificate and to cancel those originally issued or to present the tax demand in subsequent years.
§ Mr. Simon
I have noted the hon. Member's views. It was made clear 562 when post-war credit certificates were issued that title to the credit for any year depended on payment of the tax for the year. Where the full tax was not paid the full credit was not earned, and the Exchequer cannot now make a payment in respect of tax which it did not receive.
§ Mr. Swingler
Is not the Financial Secretary aware that it appears that certain citizens are being informed for the first time of tax arrears dating back sixteen or seventeen years and that sums are being deducted from the amount shown on the post-war credit certificates with which they were issued? Is not this grossly incompetent administration and very unfair on the citizens concerned? Surely, where it can be shown that revised post-war credit certificates were not issued and that the Inland Revenue has not attempted to collect the tax in the intervening fifteen or sixteen years, the Treasury should issue waivers in this kind of case.
§ Mr. Simon
We went into this matter very fully when we debated the Income Tax (Repayment of Post-War Credits) Act. It was generally agreed that the Exchequer could not repay the credits in the circumstances which the hon. Member mentions. I do not think that any Amendment was moved, and certainly none was pressed to a Division, after we had discussed the matter. It was by no means invariably the fault of the Inland Revenue in the years concerned that it lost sight of the taxpayer and failed to recover the tax in question.
Mr. H. Wilson
I welcome the hon. and learned Gentleman's statement that the Revenue cannot pay back tax which it has not received and I hope that he will apply that rule more widely in the case of dividend stripping. Will he answer two supplementary questions? Is there any withholding of the repayment of post-war credits in respect of tax arrears for a date later than the year to which the credit applies? Secondly, in cases such as those mentioned by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler)—these are genuine cases—where there has been no previous notification, or no traceable notification of liability, will the Revenue give to the holder of the credit in each case a full statement of the tax position 563 for the year in question so that, if necessary, even at this late date and with great difficulty, it can be challenged?
§ Mr. Simon
I think that "invalid" is the wrong way to put it. Credit certificates were issued in advance of the setting up of the P.A.Y.E. system, as the right hon. Gentleman will remember, but on the back they carried a warning that the right to the post-war credit depended upon the payment of the full amount of Income Tax due for the year.
If the Revenue cannot prove that it sought recovery of this tax at the time, is the Minister prepared to do what my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) suggested and give waivers? Most of these matters are settled within six years or they lapse, and it is a bit thick if sixteen years afterwards the Revenue suddenly produces some claim which is sixteen years old. Where the Revenue fails to prove that it sought recovery of the tax, will the hon. and learned Member issue a waiver?
§ Mr. Swingler
In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter on the Adjournment.