§ Nothing is more offensive to the vast majority of men and women who pay their income tax automatically through PAYE than the knowledge that a small minority have scope for evading and 261 avoiding taxation either through limitations in the powers of the Revenue or through loopholes in the law. I propose to take steps to deal with both these problems.
§ First, tax evasion—and by that I mean tax-dodging which involves breaking the law of the land. Evasion is not only unfair to the many millions of taxpayers who pay their tax bills honestly; it brings the whole system into disrepute. I am aware of the anxiety that has been expressed about the current extent of evasion and I have now decided that the Inland Revenue should be given additional powers to enable it to uncover evasion more effectively.
§ It is important in this area to weigh the requirements of an effective and fair tax system with the proper concern, shared by hon. Members on both sides of the House, for the privacy of the citizen.
§ I believe that the proposals I shall make strike the right balance. My main proposals are as follows. I have decided to strengthen the powers which require a person to produce for inspection documents in his power or possession which bear on his liability to tax. There will be a parallel power to obtain from a taxpayer's spouse and children documents bearing on his own liability. Where a person is carrying on a business the Inspector of Taxes will be given power to require the production of relevant documents from other businesses, including banks, in order to determine that person's tax liability. But the power to approach any person other than the taxpayer himself will be exercisable only with the consent of a General or Special Commissioner of Income Tax.
§ These proposals represent the minimum that is needed to help the Inland Revenue to deal with evasion and to be fair to ordinary working people who pay their tax under PAYE.
§ In other democratic countries in Europe and North America the Revenue authorities already have such powers. Indeed the powers available in the United States, Canada and Australia are a good deal wider than those I now propose. I think the vast majority of taxpayers will feel it was high time that in this respect we were brought more into line with our friends and competitors.