THE SUPER-TAX. (Hansard, 16 June 1910)

§ LORD HYLTON
My Lords, I rise to ask His Majesty's Government whether the cost of maintenance, repairs, insurance, and management of landed property referred to in Section 69 of the Finance Act, 1909–10, will be repaid out of Income or Super-Tax now due, if applied for under the conditions laid down by the section; and, if so, how and when application for such repayment should be made.
The difficulty arises under the construction of Section 62 of the Finance Act. The point is this. If under Section 69 of the Act a landowner has been actually repaid the extra twelve and a-half per cent. which he is going to be allowed he will be allowed to deduct that sum from the assessment which he makes for the Super-Tax. It is clear from the wording of the Act that he will be able to deduct that despite anything which is said on the Super-Tax demand note, but it is very likely that in many cases we shall have to wait so long to get our repayment under Section 62 that we shall have to pay our Super-Tax first, and in that case the difficulty arises that the duty will be repayable to us but will not have been repaid.

LORD DENMAN
My Lords, I think, roughly, that the answer to the Question which the noble Lord has put on the Paper is what I gave in reply to him on Tuesday evening—that the abatement in Section 69 of the Finance Act, 1909–10, will be repaid on application by the Inland Revenue. But as the point is of some importance, perhaps he will allow me to amplify that answer. The additional relief from ordinary Income Tax granted under Section 69 for the cost of maintenance, repairs, insurance, and management is granted for the year 1909–10 for the first time, and it is to be granted by way of repayment only. By Section 66 (2) (a) this relief is 922 allowed as a deduction in computing income for Super-Tax purposes, and then normally no question of repayment of Super-Tax will arise. The Super-Tax assessments for the year 1909–10, however, are directed to be made on the basis of the statutory income for 1908–09, and as Section 69 does not apply to that year the only course has been to allow the relief from Super-Tax for 1909–10 by way of repayment. Claims for relief from Super-Tax should be included with the claims for repayment of the ordinary Income Tax, and the forms will shortly be available at the offices of Surveyors of Taxes. It follows that in filling up return forms for Super-Tax for 1909–10 no deduction under Section 69 should be included. Although it is not strictly relevant to the noble Lord's Question, it may relieve the minds of some of your Lordships to know that the great majority of the details required for filling up the forms issued by the Super-Tax Commissioners are not likely to be required after the first year.

THE EARL OF CAMPERDOWN
In reference to what has just fallen from the noble Lord, can he tell us whether it is absolutely legal to require every one of the details mentioned in the form?

LORD DENMAN
I have not the section of the Act by me, but the point was raised the other night by Lord Avebury. I have made inquiry regarding it, and I believe there is no doubt that it is absolutely legal to ask for these details.

THE EARL OF CAMPERDOWN
The noble Lord is quite certain on that point?

LORD DENMAN
Yes, I am certain.

§ THE MARQUESS OF SALISBURY
Are we to understand that all the relief given under the clauses cited by the noble Lord opposite is to be given by way of repayment?

LORD DENMAN
There are two separate cases—Income Tax and Super-Tax. With regard to Income Tax, the Act lays it down that the relief will always be by repayment. This year the relief in regard to Super-Tax will also be by repayment, but in future years it will be done in the ordinary way of deduction.

THE EARL OF CAMPERDOWN
I do not wish to be insistent, but at the same time I should like to be quite certain on this point. We are informed that we are to state in regard to any land, tenements, or hereditaments—

LORD DENMAN
What section?

THE EARL OF CAMPERDOWN
That is the point; it is no section. I am referring to the regulations with regard to the Super-Tax. We are informed that we are to state the precise situation of our property, with the name of the occupier, and the rent or annual value. Am I correct in understanding the noble Lord opposite to mean that we are bound to give the names of every occupier of every cottage, the precise situation of every allotment, and other similar details? The noble Lord says it is legal, but would he point out to me the words in the Act which empower the authorities to make a demand of this sort?

§ LORD HENEAGE
While the noble Lord is looking that up, may I point out that the only way in which these regulations can be asked for is under subsection (8) of Section 72, which distinctly says that the Commissioners may make such regulations as are required to carry out that section. I should like the noble Lord to show how it is necessary, in order to carry out the purposes of this section, that we should be required to give all these details. Moreover, when they have got this information it is not of the slightest use to the Commissioners. We are asked to send in the statutory rent. Now the statutory rent is the rent sent in in the demand notes in respect of Land Taxes and Income Tax. That is the basis on which those taxes are paid. Copies of those demand notes are kept in the office of the Supervisor of Taxes in each county, and if the authorities have a doubt about the good faith, honesty, or arithmetic of those who send in returns, they have only to ask these supervisors for the information they desire. I cannot imagine that any reasonable man would suppose that anyone would send in a return which was false when he knew himself that it was false, and that the supervisor in his own county would also know it was false.

LORD DENMAN
We are on an entirely different point from that in the Question on the Notice Paper, and perhaps the noble Earl, Lord Camperdown, will give notice of his question. But, speaking offhand—I do not like absolutely to bind myself—I think the authority for demanding these particulars is given by Section 72, subsection (2)— Every person upon whom notice is served in manner prescribed by regulations under this section by the Special Commissioners requiring 924 him to make a return of his total income from all sources…shall, whether he is or is not chargeable with the Super-Tax, make such a return in the form and within the time required by the notice. Those are the words—" in the form…required by the notice."

§ LORD HENEAGE
That is not the subsection which enables the Treasury officials to make these regulations. They are made under subsection (8) of Section 72, which runs— The Commissioners may make regulations for the purpose of carrying this section into effect. "This section" only, and for no other purpose.

THE EARL OF CAMPERDOWN
I will put down a Question, as the noble Lord requests. I merely wish to say this, that the information is already in the possession of the Income Tax authorities. Why, because the Government choose to impose two different sorts of taxes, should we be required to make these duplicate returns? What Lord Heneage said a moment ago is perfectly correct, that it is of no possible use to the Inland Revenue authorities to know the names of the cottagers, or the situation of their allotments, or other minute details of that kind. On the other hand, the preparation of this information involves a frightful amount of labour on those from whom it is demanded, without any corresponding advantage to the Revenue that I can see. If the meaning of the Act is that the Commissioners have the right to demand any return they like, however useless it may be, all I can say is that we are living in a nice state of things.