HL Deb 30 January 1974 vol 349 cc367-9

2.39 p.m.

LORD BEAUMONT OF WHITLEY

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

The Question was as follows:

To ask Her Majesty's Government whether it is true that income tax is not levied on the earnings of prostitutes; and, if so, why.

THE MINISTER WITHOUT PORTFOLIO (LORD ABERDARE)

My Lords, the profits of the trade of prostitution are liable to income tax.

LORD BEAUMONT OF WHITLEY

My Lords, is this in fact followed up and are known prostitutes assessed and demand notes sent to them for their tax?

LORD ABERDARE

My Lords, whenever a case comes to the notice of the Inland Revenue they are assessed for tax.

BARONESS GAITSKELL

My Lords, would it not be appropriate, seeing that profits are taxed, to make another killing and to subject the clients of prostitutes to value added tax?

LORD ABERDARE

My Lords, I think that would in the first place depend on turnover.

VISCOUNT TENBY

My Lords, if the Government take the tax does that mean that they are living on immoral earnings?

LORD ABERDARE

No, my Lords; it merely means that under Schedule D all trade activities are taxable.

LORD DOUGLASS OF CLEVELAND

My Lords, may I ask how much tax is collected from this particular source?

LORD ABERDARE

My Lords, I regret that I cannot answer that question.

LORD DOUGLASS OF CLEVELAND

My Lords, can I have a Written Answer on that point in order that we may know how effective the noble Lord's Answer is?

LORD ABERDARE

My Lords, I will see whether it is available.

LORD SHACKLETON

My Lords, can the noble Lord say whether we are likely to receive a Directive from the E.E.C. on this subject?

LORD ABERDARE

My Lords, I doubt whether there is any barrier to trade involved.

LORD BEAUMONT OF WHITLEY

My Lords, would the noble Lord say how long this practice of taxing the earnings of prostitutes has been pursued? I understand that in the past this has not been done, because of the point so well made, that this meant the State was living off immoral earnings. Is this practice a fairly recent innovation?

LORD ABERDARE

My Lords, it is not a recent innovation. It has always been interpreted so; but, of course, there are very great difficulties, as the noble Lord realises, in collecting this tax.

BARONESS SUMMERSKILL

My Lords, can the noble Lord say how the Inland Revenue Department discover the whereabouts of these ladies?

LORD ABERDARE

My Lords, there are various ways in which their whereabouts may come to light. For example, there may be a case where somebody is found to have a large capital sum invested somewhere; the Inland Revenue make inquiries and they find out the origin of it and then they issue a claim for tax.

BARONESS STOCKS

My Lords, how can the taxation authorities deal with the situation in which a prostitute has to surrender a proportion of her earnings to her male partner? The problem is that the male partner cannot disclose his earnings because they would be illegal.

LORD ABERDARE

Of course, my Lords, under Schedule D one is allowed to set off expenses against profits.