§ 2.38 p.m.
§ LORD RAGLANMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they will allow private persons to set the expenses of an accountant against tax.]
§ LORD SHEPHERDNo, my Lords. I am advised that a tax deduction is not admissible for these expenses and that it has never been found possible to adopt the suggestion that the law on this matter should be changed.
§ LORD RAGLANMy Lords, I have no personal interest, because I have a business, and nearly all my accountant's time is taken up with that business. May I ask my noble friend whether the Government do not consider not only that such a concession would be fair to taxpayers, but that by encouraging taxpayers to send in professionally drawn-up tax returns Her Majesty's inspectors of taxes would be saved a great deal of time?
§ LORD SHEPHERDMy Lords, obviously this is a matter that has been taken into account by many previous Administrations. In most cases—in fact, I think in the vast majority of cases—the taxpayers complete the form. If there are any difficulties—and difficulties sometimes arise—they can consult their accountant, their bank manager, or some of their friends. But I understand that there is no great problem at the moment.
§ LORD DERWENTMy Lords, as accountants are in many cases doing Government work for the Government, would it not be fairer that tax relief should be allowed?—because it is quite impossible for the ordinary individual, not trained as an accountant, to complete his form.
§ LORD SHEPHERDMy Lords, the individual is required to state on the form only the facts that are clearly known to him. This is a statement of his personal income. He is not required to do anything more.
§ LORD MITCHISONMy Lords, when Schedule A was abolished, the results in terms of tax were exceedingly complicated. There was an option in connection with Schedule A which took a lot of working out. Is it not rather much to expect people to do that entirely on their own? If we recognise the status of accountants by obliging the General Commissioners to hear them on appeal as is done under the 1952 Act, ought there not to be some provision in proper cases for allowing the cost of their services?
§ LORD SHEPHERDMy Lords, when I saw this Question on the Order Paper I had a great fear that it would cause some interest. My noble friend will be aware that in the case of the capital gains tax and the Land Commission Bill accountants' fees, where they arise from work as a result of valuation and apportionment, are an allowable expense. I have not heard, other than from noble Lords this afternoon, that there is any major difficulty in the completion of a straightforward income tax return.
§ LORD RAGLANMy Lords, my noble friend knows that when one firm is taken over by another the shareholders are faced with enormously complicated calculations with regard to capital gains tax. These calculations are worth £10 or £15 of any accountant's time. Is it right that 1360 unmathematically minded shareholders should be handicapped in this way without being able to recoup some of the cost?
§ LORD SHEPHERDMy Lords, I might say that I recently had to complete my son's first income tax return. It was a formidable document but, like most people in this country, having read it I was able to provide the necessary information. With regard to the more complicated matters which no doubt arise for those who are reasonably financially well-off, in my experience I find the services of my bank manager, which are fairly reasonable so far as cost is concerned, quite satisfactory.
§ BARONESS SUMMERSKILLMy Lords, is not the real reason that the innocent and the ignorant are more profitable to the Inland Revenue, and therefore it is not in the interests of the Government to allow this concession if they can possibly refuse it?
§ LORD SHEPHERDMy Lords, quite obviously, I should not like to answer that question without notice.
§ LORD MOLSONMy Lords, in view of the fact that the Inland Revenue does not allow any allowances that are not claimed, and in view of the fact that many of these are of a highly technical nature, would it not be only fair that, as an accountant is necessary for the purpose of presenting all the claims to which a taxpayer is entitled, the cost of the accountant should be allowed in this connection?
§ LORD SHEPHERDMy Lords, surely when you complete a form in regard to your own personal income tax the expenditure involved is (shall we say?) in the nature of any other form of expense we undertake in the course of our daily life. I have a great deal of sympathy with the views expressed in this matter, but the law has been in existence for many years, and I am quite sure it would raise very serious difficulties if we were to consider a change.
LORD HAWKEMy Lords, if the position is as simple as the noble Lord says, how is it that certain taxpayers have not yet received their refunds of tax which are normally payable in November?
§ LORD SHEPHERDMy Lords, I should have thought that that was entirely another question. I hope the House will not take advantage of the Captain of the Gentlemen at Arms or Chief Whip answering for the Treasury; but if we wanted to pursue this very interesting point, perhaps we could consider it on another occasion.