HC Deb 31 May 1960 vol 624 cc1239-45

Amendment proposed: In page 40, line 3, at beginning insert "twice".—[Mr. Roy Jenkins.]

Question put, That "twice" be there inserte:—

The Committee divided: Ayes 168, Noes 248.

Division No. 102.] AYES [6.29 p.m.
Abse, Leo Deer, George Hughes, Hector (Aberdeen, N.)
Ainsley, William Delargy, Hugh Hunter, A. E.
Altaun, Frank (Salford, E.) Dempsey, James Hynd, H. (Accrington)
Awbery, Stan Diamond, John Irvine, A. J. (Edge Hill)
Bacon, Miss Alice Dodds, Norman Janner, Barnett
Baxter, William (Stirlingshire, W.) Dugdale, Rt. Hon. John Jay, Rt. Hon. Douglas
Bence, Cyril (Dumbartonshire, E.) Ede, Rt. Hon. Chuter Jeger, George
Benson, Sir George Edelman, Maurice Jenkins, Roy (Stechford)
Blyton, William Edwards, Robert (Bilston) Johnson, Carol (Lewisham, S.)
Bowden, Herbert W. (Leics, S.W.) Edwards, Walter (Stepney) Johnston, Douglas (Paisley)
Bowles, Frank Evans, Albert Jones, Jack (Rotherham)
Boyden, James Fitch, Alan Jones, J. Idwal (Wrexham)
Brown, Alan (Tottenham) Fletcher, Eric Jones, T. W. (Merioneth)
Brown, Thomas (Ince) Forman, J, C. Kenyon, Clifford
Butler, Herbert (Hackney, C.) Fraser, Thomas (Hamilton) Key, Rt. Hon. C. W.
Butler, Mrs. Joyce (Wood Green) George, Lady Megan Lloyd Lee, Frederick (Newton)
Chapman, Donald Ginsburg, David Lipton, Marcus
Chetwynd, George Greenwood, Anthony Logan, David
Cliffe, Michael Griffiths, W. (Exchange) Loughlin, Charles
Corbet, Mrs. Freda Hall, Rt. Hn. Glenvil (Colne Valley) Mabon, Dr. J. Dickson
McCann, John
Craddock, George (Bradford, S.) Hamilton, William (West Fife) MacColl, James
Cronin, John Hart, Mrs. Judith McInnes, James
Crosland, Anthony Hayman, F. H. McKay, John (Wallsend)
Cullen, Mrs. Alice Hilton, A. V. Mackie, John
Darling, George Holman, Percy McLeavy, Frank
Davies, C. Elfed (Rhondda, E.) Houghton, Douglas Mahon, Simon
Davies, Harold (Leek) Howell, Charles A. Mallalieu, J.P.W.(Huddersfield, E.)
Davies, Ifor (Cower) Hughes, Cledwyn (Anglesey) Manuel, A. C.
Davits, S. O. (Merthyr) Hughes, Emrys (S. Ayrshire Mason, Roy
Mayhew, Christopher Reid, William Thomas, George (Cardiff, W.)
Mellish, R. J. Roberts, Albert (Normanton) Thomas, Iorwerth (Rhondda, W.)
Mendelson, J. J. Roberts, Goronwy (Caernarvon) Thompson, Or. Alan (Dunfermline)
Millan, Bruce Robinson, Kenneth (St. Panoras, N.) Thomson, G. M. (Dundee, E.)
Mitchison, G. R. Rogers, G. H. R. (Kensington, N.) Thornton, Ernest
Monslow, Walter Ross, William Tomney, Frank
Morris, John Royle, Charles (Salford, West) Ungoed-Thomas, Sir Lynn
Mort, D. L. Shinwell, Rt. Hon. E. Wainwright, Edwin
Moyle, Arthur Short, Edward Warbey, William
Neal, Harold Silverman, Julius (Aston) Watkins, Tudor
Noel-Baker, Francis (Swindon) Silverman, Sydney (Nelson) Weitzman, David
Noel-Baker, Rt. Hn. Philip (Derby, S.) Slater, Mrs. Harriet (Stoke, N.) Wells, Percy (Faversham)
Oliver, G. H. Slater, Joseph (Sedgefield) Wells, William (Walsall, N.)
Oswald, Thomas Small, William Wheeldon, W. E.
Owen, Will Smith, Ellis (Stoke, S.) Willey, Frederick
Panned, Charles (Leeds, W.) Sorensen, R. W. Williams, D. J. (Neath)
Pargiter, C. A. Soskice, Rt. Hon. Sir Frank Williams, Rev. Ll. (Abertillery)
Paton, John Spriggs, Leslie Williams, W. R. (Openshaw)
Pavitt, Laurence Steele, Thomas Willis, E. G. (Edinburgh, E.)
Pearson, Arthur (Pontypridd) Stewart, Michael (Fulham) Winterbottom, R. E.
Peart, Frederick Stonehouse, John Woodburn, Rt. Hon. A.
Pentland, Norman Stones, William Woof, Robert
Prentice, R. E. Strachey, Rt. Hon. John Yates, Victor (Ladywood)
Price, J. T. (Westhoughton) Stress, Dr. Barnet (Stoke-on-Trent, C.) Zilliacus, K.
Proctor, W. T. Summerskill, Dr. Rt. Hon. Edith
Pursey, Cmdr, Harry Swingler, Stephen TELLERS FOR THE AYES:
Randall, Harry Sylvester, George Dr. Broughton and Mr. Redhead.
Rankin, John Taylor, Bernard (Mansfield)
NOES
Aitken, W. T. Critchley, Julian Hopkins, Alan
Allason, James Curran, Charles Hornby, R. P.
Alport, C. J. M. Currie, G. B. H. Hornsby-Smith, Rt. Hon. Patricia
Amory, Rt. Hn. D. Heathcoat (Tiv'tn) Dalkeith, Earl of Howard, Gerald (Cambridgeshire)
Ashton, Sir Hubert d'Avigdor-Goldsmid, Sir Henry Howard, John (Southampton, Test)
Atkins, Humphrey Deedes, W. F. Hughes-Young, Michael
Balniel, Lord de Ferranti, Basil Hutchison, Michael Clark
Barber, Anthony Digby, Simon Wingfield Iremonger, T. L.
Barlow, Sir John Donaldson, Cmdr. C. E. M. Irvine, Bryant Godman (Rye)
Barter, John Dray son, G. B. Jackson, John
Batsford, Brian du Cann, Edward James, David
Baxter, Sir Beverley (Southgate) Duthie, Sir William Jenkins, Robert (Dulwich)
Beamish, Col. Tufton Emery, Peter Jennings, J. C.
Bell, Ronald (S. Bucks.) Emmet, Hon. Mrs. Evelyn Johnson, Dr. Donald (Carlisle)
Bennett, F. M. (Torquay) Errington, Sir Eric Johnson, Eric (Blackley)
Bennett, Dr. Reginald (Gos & Fhm) Farey-Jones, F. W. Joseph, Sir Keith
Berkeley, Humphry Fell, Anthony Kerans, Cdr. J. S.
Bevins, Rt. Hon. Reginald (Toxteth) Finlay, Graeme Kerby, Capt. Henry
Bidgood, John C. Fisher, Nigel Kerr, Sir Hamilton
Biggs-Davison, John Forrest, George Kimball, Marcus
Birch, Rt. Hon. Nigel Fraser, Hn. Hugh (Stafford & Stone) Kitson, Timothy
Bishop, F. P. Fraser, Ian (Plymouth, Sutton) Lambton, Viscount
Bossom, Clive Freeth, Denzil Langford-Holt, J.
Bourne-Arton, A. Gammans, Lady Leavey, J. A.
Bowen, Roderic (Cardigan) Gardner, Edward Leburn, Gilmour
Box, Donald Glyn, Dr. Alan (Clapham) Legge-Bourke, Maj. H.
Boyle, Sir Edward Glyn, Sir Richard (Dorset, N.) Lewis, Kenneth (Rutland)
Braine, Bernard Godber, J. B. Linstead, Sir Hugh
Brewis, John Goodhew, Victor Litchfield, Capt. John
Brooke, Ht. Hon. Henry Cower, Raymond Longden, Gilbert
Brooman-White, R. Grant, Rt. Hon. William (Woodside) Loveys, Walter H.
Browne, Percy (Torrington) Grant-Ferris, Wg. Cdr. R. (Nantwich) Lucas, Sir Jocelyn (Portsmouth, S.)
Bullard, Denys Green, Alan Lucas-Tooth, Sir Hugh
Burden, F. A Grimond, J. McAdden, Stephen
Butcher, Sir Herbert Grimston, Sir Robert MacArthur, Ian
Campbell. Sir David (Belfast, S.) Hall, John (Wycombe) McLaren, Martin
Carr, Compton (Barons Court) Hamilton, Michael (Wellingborough) McLaughlin, Mrs. Patricia
Carr, Robert (Mitcham) Harris, Reader (Heston) Maclay, Rt. Hon. John
Gary, Sir Robert Harrison, Brian (Maldon) Maclean, Sir Fitzroy (Bute&N. Ayrs.)
Channon, H. P. G. Harrison, Col. J. H. (Eye) McMaster, Stanley R.
Chataway, Christopher Harvie Anderson, Miss Maginnis, John E.
Clark, Henry (Antrim, N.) Hay, John Manningham-Buller, Rt. Hn. Sir R.
Clark, William (Nottingham, S.) Heald, Rt. Hon. Sir Lionel Markham, Major Sir Frank
Clarke, Brig. Terence (Portsmth, W.) Henderson, John (Cathcart) Marlowe, Anthony
Cleaver, Leonard Hendry, Forbes Marshall, Douglas
Collard, Richard Hicks Beach, Maj. W. Marten, Neil
Cooke, Robert Hill, Mrs. Eveline (Wythenthawe) Matthews, Gordon (Meriden)
Cooper, A. E. Hill, J. E. B. (S. Norfolk) Mawby, Ray
Cooper-Key, Sir Neill Hinchingbrooke, Viscount Maydon, Lt.-Cmdr. S. L. C.
Cordeaux, Lt.-Col. J. K. Hirst, Geoffrey Montgomery, Fergus
Cordle, John Hocking, Philip N. Morrison, John
Corfield, F. V. Holland, Philip Mott-Radclyffe, Sir Charles
Costain, A. P. Hollingworth, John Nabarro, Gerald
Coulson, J. M. Hope, Rt. Hon. Lord John Neave, Airey
Nicholls, Harmar Ridley, Hon. Nicholas Thompson, Richard (Croydon, S.)
Nicholson, Sir Godfrey Ridsdale, Julian Thorneycroft, Rt. Hon. Peter
Noble, Michael Roberts, Sir Peter (Heeley) Thornton Kemsley, Sir Colin
Oakshott, Sir Hendrie Roots, William Tiley, Arthur (Bradford, W.)
Orr-Ewing, C. Ian Ropner, Col. Sir Leonard Tilney, John (Wavertree)
Osborn, John (Hallam) Scott-Hopkins, James Turton, Rt. Hon. R. H
Osborn, Cyril (Louth) Shaw, M. Tweedsmuir, Lady
Page A. J. (Harrow, West) Shepherd, William van Straubenzee, W. R.
Page, Graham Simon, Sir Jocelyn Vaughan-Morgan, Sir John
Pannell, Norman (Kirkdale) Smith, Dudley (Br'ntf'rd & Chiswick) Wade, Donald
Partridge, E. Smyth, Brig. Sir John (Norwood) Wakefield, Edward (Derbyshire, W.)
Pearson, Frank (Clitheroe) Speir, Rupert Wakafield, Sir Wavell (St. M'lebone)
Peel, John Stevens, Geoffrey Wall, Patrick
Percival, Ian Steward, Harold (Stockport, S.) Ward, Dame Irene (Tynemouth)
Peyton, John Stodart, J. A. Watts, James
Pickthorn, Sir Kenneth Stoddart-Soott, Col. Sir Maloim Wells, John (Maidstone)
Pike, Miss Mervyn Storey, Sir Samuel Whitelaw, William
Pilkington, Capt. Richard Studholme, Sir Henry Williams, Dudley (Exeter)
Pitman, I. J. Summers, Sir Spencer (Aylesbury) Wills, Sir Gerald (Bridgwater)
Pitt, Miss Edith Sumner, Donald (Orpington) Wilson, Geoffrey (Truro)
Pott, Percivall Talbot, John E. Wise, A. R.
Powell, J. Enoch Tapsell, Peter Wolrige-Gordon, Patrick
Prior-Palmer, Brig. Sir Otho Taylor, Sir Charles (Eastbourne) Wood, Rt. Hon. Richard
Proudfoot, Wilfred Taylor, W. J. (Bradford, N.) Woodhouse, C. M.
Ramsden, James Teeling, William Woodnutt, Mark
Rawlinson, Peter Temple, J. Woollam, John
Redmayne, Rt. Hon. Martin Thatcher, Mrs. Margaret Yates, William (The Wrekin)
Rees, Hugh Thomas, Leslie (Canterbury)
Rees-Davies, W. R. Thomas, Peter (Conway) TELLERS FOR THE NOES:
Renton, David Thompson, Kenneth (Walton) Mr. Legh and Mr. Sharples

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Stevens

I do not quite know, Mr. Blackburn, whether to raise the point that I have in mind on this Motion or on the Motion that Clause 46 stand part of the Bill. Clauses 44, 45 and 46 hang together.

Clause 44 provides a penalty for fraudulently making an incorrect return of

  1. (i) fifty pounds; and
  2. (ii) twice the amount of the difference specified in subsection (1) of section forty-six of this Act."
Clause 45 specifies the penalty for negligently making incorrect returns, which is £50 plus the amount of the difference specified in subsection (1) of section forty-six of this Act. In Clause 46 we find the yardstick against which the penalty is measured. The amount of the penalty in respect of fraud and negligence is the same. In one case it is once the base and in the other case twice the base, but the base is the total amount of tax falling short of the amount of tax which should have been paid.

Under Clause 44 a taxpayer may have fraudulently omitted part of his income and therefore pays twice the total tax which should have been paid. If in the same return in respect of another type of income he has negligently omitted part of his income, he will pay, not once the tax omitted negligently, but once the tax which has not been paid.

Taking these three Clauses together, it seems to me that, in respect of the same return, a taxpayer may be called upon to pay a penalty of three times the total tax, once in respect of negligence and twice in respect of fraud. I do not think that my right hon. Friend the Chancellor of the Exchequer had that in mind. I should like the point to be clarified.

An Amendment to Clause 45 was tabled which sought to clarify the position, but, in the wisdom of the Chair, it was not selected, and I therefore raise the point on the Question, "That the Clause stand part of the Bill." If what I have pointed out was not intended, I think that it should be made perfectly plain.

The Attorney-General

I think that my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) is under a misapprehension. I certainly do not think that the consequences which he suggests could arise. First, the offence under Clause 44 is of delivering fraudulently an incorrect return. A person does not become liable to a separate penalty for each incorrect entry in the return. If there are three incorrect items in the return and they have all been fraudulently entered, one does not become liable to a penalty of £150 and six times the amount of the difference. The return itself would be a fraudulent return and the penalty would be that prescribed by Clause 44. That is the maximum. I emphasise that because my hon. Friend said, more than once, that, where a taxpayer was guilty of conduct bringing him within Clause 44, he would have to pay £50 and twice the amount. That is not so. That is the maximum, and the amount would be settled by the court either initially or on appeal.

The point which is worrying my hon. Friend, apparently, is the case where, in the same return, there is a fraudulent entry and a negligent entry. I should have thought that it would be very remarkable to find fraud accompanied by negligence in the same return. It is a difficult hypothetical case for one to consider, but I can conceive of a case where the Revenue may proceed, first, for fraud, and secondly, in the alternative, for negligence on the basis that it might or might not succeed in establishing fraud. If it proceeded in that way in relation to a certain return, it would be for the court to determine which was established and then the penalty either for fraud or negligence would be incurred and assessed.

Again, it is a maximum penalty. I do not see the least likelihood of proceedings for negligence and fraud in relation to the same return, and consequently, I do not think that there is the slightest possibility of these penalty provisions being cumulative in respect of the same returns. I will certainly consider the point again between now and the Report stage, but I think that there is no ground for my hon. Friend's fears.

Question put and agreed to

Clause ordered to stand part of the Bill.

Clause 46 ordered to stand part of the Bill.