HL Deb 06 December 1927 vol 69 cc545-50

LORD HARRIS had given Notice to call attention again to the procedure adopted by the Income Tax authorities in the matter of professional cricketers' benefit moneys; and to ask what is the justification for the retention of moneys accruing from illegal taxation. The noble Lord said: My Lords, I also do not apologise for again bringing this matter before your Lordships. I addressed a letter to the public Press on the particular case to which I will refer presently, but no notice was taken of it, and I hardly expected that any would be. But I regard Parliament, and this House particularly, as a place which presents an opportunity of bringing forward the grievances of subjects who are suffering, and therefore I am now drawing attention to what I conceive to be a very serious grievance on the part of a few individuals only.

Some months ago I brought up the case of a professional cricketer who was being forced into litigation by the action of the Revenue authorities. Having won his case in two Courts, he was forced into a third, where there was a majority of the Judges against him, and it was at that stage that I drew the attention of your Lordships to the case, and the noble and learned Viscount on the Woolsack very kindly promised to bring the matter to the attention of his colleague, the Chancellor of the Exchequer, which he did. The offer that was made by the Revenue authorities, however, was so ludicrously useless, and from our point of view unfair to future eases, that it was impossible to accept it. The case was therefore fought in your Lordships' House, where a great majority of the Law Lords was in favour of the appellant's case. Therefore that particular individual was exempt from paying tax on his benefit money, and I take it—and I hope—that professionals in future will not be assessed for Income Tax on that particular money.

That was all right, but it was not all right as regards those who have already paid the tax. I will give your Lordships a particular instance. This is the case of a professional whose benefit brought him in about £650. Only once in his whole career does he receive that benefit, which the House of Lords has now decided is a present from his employer. The effect of his receiving that was to bring this man's whole receipts for the year into the taxable limit, and he was therefore called on to pay £126 odd in that year as Income Tax. If he had not received the benefit in that year he would not have been taxed. Seeing the case of his comrade and the decision of the House of Lords, he appealed for a return of the tax he had paid. It was refused because he had not appealed in time. These are very simple, humble men, and the Government official addresses an official document to them demanding payment of the tax due to the Government, and this man, believing that the Government Department was justified in making this demand, very incautiously paid it. Quite a number of others did the same. They paid the tax instead of fighting it, as was done in the case of the professional, Seymour. If they had waited, and if those who have advised them had known earlier that these, demands were being made, they no doubt would have fought them very much earlier; but they did not know that the demands were being made until the matter was brought to their notice by Seymour's case.

It is now decided by the highest Court in the land that the Revenue authorities have no right to assess these men for that particular item of income. It was an illegal demand, but the Government are going to stick to it, because the men did not appeal in time. What can one say of such action as that? Surely it is rather ignoble that these poor men, who receive these rewards for their skill and prowess once in their lives (as a rule it is once in their lives; there are very exceptional cases where a man gets it twice) should have so much of it taken away from them upon a ground which is not justified in law. I am sure that my noble friend who is going to reply will have nothing to say except that the man did not appeal in time. I do not suppose he knew the law very intimately, and it was his business to know it. At the same time it was a very severe hardship and I nope your Lordships will think that I was justified in bringing it to the notice of the public

THE EARL OF PLYMOUTH

My Lords, I naturally wish to be as sympathetic as possible in respect of this question which the noble Lord, Lord Harris, has raised this afternoon. I regret that owing to some misunderstanding I was not aware of the actual point to which he wished to call attention and, therefore, I have not been able to look into the case itself. But I feel certain that we shall all feel very sympathetic in a case of this kind. I ought, I think, to draw your Lordships' attention to one fact and that is that the noble Lord has raised this question as the result of a decision which was come to in your Lordships' House with regard to a Kent professional cricketer named Seymour, in respect of the money he had derived from a benefit match. After the case had passed through several Courts the House of Lords decided that the money which he had received was not taxable. But that does not mean that all future cases of this sort are necessarily governed by the decision in that case; because the facts vary considerably in different cases. It is generally agreed, I think, that in the case of Seymour the reason why the majority of those sitting in the House of Lords decided that this money was not taxable was that the money which he received was not received as a contractual right but was, as it were, a testimonial and not a perquisite. It was not remuneration for services but a personal gift. That is not always the case in regard to benefit matches or the proceeds of benefit matches awarded to professionals. In fact a case such as this case came before the Courts in reference to a football professional.

LORD HARRIS

That is quite different.

THE EARL OF PLYMOUTH

It is different, I admit. I merely wished to point out that it was held in that case that the proceeds of the match were taxable because the professional in question had a right, a contractual light practically, to those proceeds. I agree that this does not apply to the case which the noble Lord brought before your Lordships this evening. I wanted merely to enter a caveat that this case of Seymour which was decided in the House of Lords must not necessarily be taken to govern all future cases.

With regard to the particular case which the noble Lord has brought forward this evening, I would certainly like to say that I will look into it and will see that it is gone into more carefully; but I feel practically certain that the answer will be that the payment by this professional had been made and completed before the Seymour case was decided in the House of Lords. I think it is a well-known rule of law that a decision of the Courts does not operate retrospectively to disturb cases which have already become final and conclusive in law, and it must be plain to everybody I think that if a rule of law such as this were to operate retrospectively it would lead to the re-opening of innumerable cases because it could not apply only in regard to professional cricketers' benefit matches, but would have to apply to all judgments that were given, and would lead, as I say, to the reopening of a great number of cases and to a great deal of confusion. It really requires very little from me to emphasise the point that a decision of the Court does not operate retrospectively.

May I draw attention to a comparatively recent case in which this was made perfectly clear? In this case the plaintiff, the owner-occupier of a house had been, as he alleged, rated by the water company in excess of what was held to be legal in another case, Dobbs' case in the House of Lords. He paid the amount demanded of him under the impression that he was bound to do so, and now he sued the company to recover the excess. The company set up that it was a voluntary payment and not recoverable. The plaintiff set up in answer that it was paid by compulsion. But the Court found as a fact that the payment was voluntary and that the money which had been paid under a mistake of law could not be recovered. In the course of the argument Mr. Henderson, who appeared for the plaintiff, urged that it was a payment in ignorance of law, and should be returned. Lord Chief Justice Coleridge then interposed: Of what law? I was ignorant of it before the decision of the House of Lords. I had held the contrary and two eminent Judges agreed with rue. Can that be put as ignorance of law? Just see what consequences would follow—that wherever there has been a reversal of judgment all the money that has been paid under the previous notion of the law can be recovered back! Has that ever been held? Can it be that every reversal of a decision may give rise to hundreds of actions to recover back money previously paid? That, I think, is almost an analogous case to this one.

This payment was made before a definite decision was come to in the Seymour case, and it really would set a very dangerous precedent if the case was reopened on this occasion. It would, I think, give rise, as I said before, to the reopening of hundreds, I may say thousands, of other cases and lead to great confusion. Those are probably the facts of the case. But owing to the fact that I sympathise, as I am sure the whole House does, very warmly indeed with what I may describe as the hardship inflicted in this case, I will certainly undertake to have it gone into more closely and see whether anything can be done in the matter.