§ Amendment made: In page 42, line 1, after "next", insert "if any".—[Mr. Barber.]
§ Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.
§ Mr. StevensUnlike other hon. Members of the Committee, I have found the Clause a little difficult to interpret. I am not entirely certain even now that I am completely satisfied about its exact meaning. In an earlier debate, my right hon. and learned Friend the Attorney-General suggested that I was still under a misapprehension. As I understand the position at the moment, where a taxpayer negligently omits part of his income from his Income Tax return, the Inland Revenue can, without further 1250 action, go back six years if he has been negligent in those earlier years.
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It seems to me that the Clause will change that practice and that if in any of those six years evidence of negligence is apparent, the Inland Revenue has the right to attach another six years. That means that if the negligence is in the current year, the Inland Revenue can go back in the current year to one year, which means seven years, and if it is in the current year but one, it can go back eight years, and so on. If I am wrong in my interpretation, I should be glad if it could be made perfectly plain that the six years' limit for negligence will stand as it is at present after the Clause becomes law.
§ The Economic Secretary to the Treasury (Mr. Anthony Barber)It is perfectly correct that the six years' limit for negligence stands, but not quite in the same way as it did before the Bill. As my hon. Friend 1251 realises, the way in which it works is that where an assessment has been made in any year within the six-year time limit to recover tax lost owing to the taxpayer's fraud, wilful default or negligence, an assessment can be made to recover tax lost owing to negligence in another year which ended not more than six years earlier than that. Where an assessment has been made in any such earlier year, an assessment may be made for a still earlier year provided that it is not more than six years earlier, and so on.
But there is the important safeguard, which my hon. Friend will have seen in the Clause, that an assessment cannot be made under the Clause for a year ending more than six years before the end of the normal year—the normal year being defined in the Clause as a year within the first six years—one cannot go back beyond six years before the normal year unless application has been made to the General or the Special Commissioners.
§ Question put and agreed to.
§ Clause, as amended, ordered to stand part of the Bill.
§ Clauses 49 to 51 ordered to stand part of the Bill.