HC Deb 26 May 1960 vol 624 cc731-3
Mr. Barber

I beg to move, in page 27, line 32, after "change", to insert: (being debts the benefit of which was assigned to the persons carrying on the trade, profession or vocation after the change) This Amendment merely puts right a flaw in the drafting. The need arose in this way. Clause 32 makes the successor to a business liable to tax in respect of sums received by him representing post cessational receipts of the old business. As a corollary, it is necessary to provide, as is provided in subsection (3), for the successor to get an allowance for any debt he has taken over at its face value, that is to the extent that he fails to recover it in full.

As provided at present, it is possible for the subsection to be open to the interpretation that a successor to such a business could make such a deduction where the predecessor kept the right to recover the debt. This is to guard against that possibility.

6.0 p.m.

Mr. Mitchison

As far as I know, we have no objection to the Amendment, but I should like to ask the hon. Member a question. This sounds to me to be the sort of case in which there may have been possibilities of fraud or tax avoidance in the past and a deliberate failure to collect debts. Is that one of the difficulties with which this set of Clauses is intended to deal?

Mr. Barber

As far as I know this Amendment deals merely with the difficulty which could possibly arise—although I do not think that it would—under this Clause. I will look into the question to see whether it has arisen in the past, but I do not know of any instance.

Mr. Mitchison

The kind of case which I have in mind is where someone is carrying on an undertaking and has deliberately failed to collect debts, relying on their coming in after the discontinuance of the business. It would not arise under the provisions of this Clause, but it would be somewhere in this group of Clauses. I am obliged to the hon. Member for saying that he will look into the matter. I merely wanted to be certain that the point is covered.

Mr. Diamond

In looking into the question I hope that the Economic Secretary will be able to confirm that, as well as banisters, everybody else who goes on a cash basis has to give a written statement to the inspector of taxes that he will send in his bills promptly. If he does so he continues to be assessed on cash payments, but if not, whether a barrister or anybody else, the arrangement does not apply.

Mr. Crosland

There has never before been a Finance Bill in which on so many occasions the Treasury Ministers, particularly the two junior Ministers, when points have been put to them, even on Amendments which they have moved, have said that they do not know what the answer is, but will inquire. I think that we should have a little more preparation and homework, particularly on Government Amendments.

Mr. Barber

I was very willing to look into the matter raised by the hon. and learned Member for Kettering (Mr. Mitchison), but in view of what has been said by the hon. Member for Grimsby (Mr. Crosland) it is reasonable that I should point out that the matter which is raised by the Amendment rises solely because of an allowance which it is proposed to give in subsection (3) of the Clause. I should have been quite in order, as the hon. and learned Member realises, in saying that I would be out of order in dealing with the point which he made. I was only trying to be helpful.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.