Section 522 of the Taxes Act (effect of reduction in basic rate on deduction of tax from payments of interest) shall apply as if a resolution having statutory effect under the Provisional Collection of Taxes Act 1968 and providing for the charging of income tax as specified in section 11 above had been passed immediately before the passing of this Act; and the proviso to paragraph (b) of the said section 522 shall apply to any over-deduction to he made good in consequence of this section as if the reference to the passing of the Act imposing the tax were a reference to a date one month after the passing of this Act." —[Mr. Robert Sheldon.]
§ Brought up, and read the First time.
§ Mr. Robert Sheldon
I beg to move, that the clause be read a Second time.
The clause is consequential upon the Government's acceptance of the amendments passed by the House in Committee reducing the basic rate from 34 per cent. to 33 per cent. As a result of the rules that we have for deduction of tax at source, there is a need to correct the over-deduction of tax when the rate is reduced. This is normally done by means of a resolution of the House. As a result of this change being made by amendment there can be no resolution, and the clause is required because there is no mechanism for dealing with the over-deduction of tax on interest. This puts the matter right.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.