DIVERS AND DIVING SUPERVISORS

HC Deb 12 July 1978 vol 953 cc1618-20

Mr. Graham Page

I beg to move amendment no. 178, in page 18, line 30, after 'section', insert 'does not apply for the years 1978–79 or 1979–80 if the person performing the duties so elects but otherwise it'. Clause 25 deals with divers and diving supervisors who logically should be charged to tax under schedule E. The clause is intended to benefit divers and diving supervisors by charging them to tax under schedule D instead of under schedule E. Generally, that will be of benefit to the taxpayer.

However, one can think of cases where it may not be of benefit at all. It may be better for the diver or the diving supervisor so charged to stay with schedule E, at least for a time. I think that he should be given the chance to make a choice. The amendment would give him the chance to make that choice for the two years 1978–79 and 1979–80 if he elects to do so. It follows from that, although it is not in the amendment, that the election would have to be by proper notice in writing and so on. This is a simple amendment to tidy up the clause.

Mr. Robert Sheldon

The right hon. Member for Crosby (Mr. Page) pointed out that the purpose of the amendment was to give those covered by the clause the right to elect to remain chargeable to tax under schedule E. We discussed this matter in Committee upstairs. The right hon. Gentleman explained that the reason for providing for elections for the schedule E basis was that, if a diver's earnings in 1978–79 were above the normal, he could be affected to his disadvantage by being forced, for tax purposes, to start a trade on 6th April this year.

This is caused by the provisions of schedule D, under which the profits of the opening year can form the basis of assessment for the first three years of assessment. That is the argument that the right hon. Gentleman used.

The present law enables the taxpayer to choose to have the assessments for both the second and third years of the trade based on the profits that arise in those years. The amendment would provide that if a diver has a particularly successful year this year—and this could well happen—he would be able, in the succeeding years, to elect to pay tax on the actual profits arising in each of those years.

The taxpayer could, of course, begin his trade in a year—I am talking about the general case now—when he knew that his profit would be particularly low. In that event the profits of that abnormally low year would form the basis of the tax assessment for the succeeding two years, and there is no provision for the Revenue to increase the profits figure to that which has arisen each year.

I think that the provision in the legislation is reasonable, and I hope that on reflection the right hon. Gentleman will agree that that is so.

Mr. Graham Page

It seems to me that the Financial Secretary is trying to get it both ways. He is trying to get advantage out of the clause where there is disadvantage to those who he intends to benefit by the clause. Because of what the right hon. Gentleman said I cannot ask leave to withdraw the amendment. If the Government feel that they cannot accept it, let them negative it.

Amendment negatived.