ACCOUNTANTS' FEES AND TAX RELIEF (Hansard, 8 May 1968)

§ LORD RAGLAN
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ LORD BESWICK
My Lords, the noble Lord will be aware that successive Governments have taken the view that they would not be justified in singling out this expense for tax relief.

§ LORD RAGLAN
My Lords, why are this Government and other Governments so mean about this matter? May I ask my noble friend two questions? Are the Government aware that someone with a business can get the cost of an accountant for his private purposes set off against taxation or thrown in with his expenses, but those without a business cannot? Is that fair? Secondly, do the Government realise how complicated taxation has become? Are they aware that a tax inspector said to me recently, "Once upon a time, one knew. Then one knew where to look. Now one just does not know even where to look"? If Her Majesty's inspectors of taxes hardly know where to look, how can private citizens possibly be expected to know?

§ LORD BESWICK
My Lords, taking the last point first, I should have thought that all of us—and that includes the Government—are aware of the complications of the tax system. I would say, however, that the form which has gone out this year is a simplified one, and I should think that that was to some extent a help to the noble Lord and others. As to the point about business accounts, I should have thought that there was a difference between the preparation of trading accounts and the completion of one's own Personal tax return. There is no question of unfairness here. As to the question of the Government's being mean, if this concession were made it would not reduce the total amount which the Chancellor of the Exchequer had to raise; it would only be a matter of 1474 shifting the burden from one to the other.

§ LORD LINDGREN
My Lords, would not my noble friend agree that the tax returns are complicated only where the sources of income are complicated?

§ LORD BESWICK
My Lords, I think there is a good deal in what my noble friend said, and I am surprised that in another place members of the Opposition were seeking to get a £40 relief for the fees of their accountants completing their personal tax returns. A person requiring an accountant's fee of £40 is clearly in a very different position from the general run of working-class people.

§ LORD BYERS
My Lords, is that not rather begging the question? Surely everybody knows that this is a most complicated matter. Could we not have it looked at again, with a view to getting a much simpler structure?

§ LORD BESWICK
My Lords, I am not talking about the structure of taxation but about what goes on when one employs an accountant to complete one's tax return. I am saying that there are millions of people in this country under P.A.Y.E. who do not require an accountant, and if a concession were made to those who do employ an accountant it would simply mean that the amount of money so lost to the Exchequer would have to be collected in other ways.

§ LORD BYERS
My Lords, does not the noble Lord realise that the P.A.Y.E. taxation system is done for the people?

§ LORD GRANVILLE OF EYE
My Lords, in view of the fact that this may affect numbers of retired people and pensioners, and having regard to the intricacies of the modern taxation system, may I ask my noble friend whether this is not the kind of reasonable, modest concession that the Government could well make?

§ LORD BESWICK
My Lords, the majority of retired people and pensioners have not the sort of money coming in which requires an accountant.

§ LORD STRATHCLYDE
My Lords, are not the Government aware that millions of working class people who are being taxed under the P.A.Y.E. system are not aware in any degree whether or 1475 not they are being properly assessed for tax, and they feel a great sense of grievance in this respect?

§ LORD BESWICK
My Lords, I am aware that there are many people who employ accountants and thereby save more in taxation than they pay to the accountants.

§ LORD CONESFORD
My Lords, did the Minister understand the noble Lord, Lord Lindgren, to say that he understood the Finance Bill?

§ BARONESS WOOTTON OF ABINGER
My Lords, when my noble friend said that if this concession were granted the money so lost to the Exchequer would have to be made up from other sources, are we to understand that a good many people are paying more tax than they ought to pay?

§ LORD BESWICK
My Lords, my noble friend, for whose astute mind I have the greatest respect, completely missed the point. If a concession were made it would mean that in this particular respect the Chancellor would not be collecting that money, and all I was saying was that he would have to collect the same amount of money in other directions.

§ LORD TREFGARNE
My Lords, would not the noble Lord agree that it is the duty of every citizen to take the best possible advantage of the tax laws as they exist? Therefore, would it not become the Government to give the citizen every assistance in this respect by allowing him the cost of his professional adviser?

§ LORD BESWICK
My Lords, I understand the attitude of the noble Lord, but I would not encourage it to the extent of paying the man who was an accomplice in avoiding taxation.

§ LORD BYERS
My Lords, may I ask the Minister to withdraw that suggestion? It has never been suggested from any side of the House that there was any question of an "accomplice" in trying to avoid taxation; it is a matter of the taxpayer getting the advantages to which he is properly and legally entitled.

§ LORD BESWICK
My Lords, I withdraw what I said to the noble Lord, 1476 Lord Trefgarne, if it was taken to imply improper avoidance. I did not mean that.

§ LORD PARGITER
My Lords, may I ask my noble friend whether there is any evidence that the Inland Revenue deal in any way unfairly with the income which is disclosed to them?

§ LORD BESWICK
My Lords, on balance, and in the case of the majority of people with whom I mix, if they play fairly with the Inland Revenue they receive fair treatment in return.