HC Deb 16 June 1925 vol 185 cc309-10W

asked the Chancellor of the Exchequer whether he is aware that, when a farmer submits accounts under Schedule B, he is allowed to deduct from his profits for Income Tax purposes both the rental value of his house and land and the rates thereon, where the house is used solely for the purpose of farming the lands only if the house and lands are rented, whereas if the house and lands are occupied by the owner the farmer is not allowed to deduct from his profits either the rental value of the house or the rates thereon and that this anomalous practice was first introduced in 1906 and renewed in 1922; and whether he will issue instructions that in future both farmers who occupy the house and lands they own and farmers who rent the house and lands they occupy shall be allowed to deduct the rental value of the house and lands they farm and the rates thereon from profits for the purpose of Income Tax, and that where the farmhouse is used partly for farm purposes the same principle shall apply to such part, in view of the anomaly of the present distinction and the increase in the number of owner-occupying farmers?


In the computation of a farmer's profits for assessment under

and gas mantles have increased, severally, in quantity; and will he give the comparative figures to the latest date available?


The imports of the articles included in the category of the McKenna Duties, in March, April, May, and the period 1st to 13th June, 1925, were as follow:

Schedule B, by reference to the rental value of his farm, the Income Tax Acts require the rental value to be taken exclusive of the value of the farmhouse in the case of an owner-occupier, but inclusive of that value in the case of a tenant-farmer. It follows that, in respect of farms of the same total rental value, the owner-occupier's Income Tax charge under Schedule B is always less than the corresponding charge upon a tenant-farmer. When, therefore, the owner-occupier seeks a reduction of the Income Tax charge on the ground that the assessment under Schedule B, which does not include the value of the farmhouse, exceeds the amount of his actual profits, no deduction is made in arriving at his actual profits for the rental value of the farmhouse or for the rates thereon, because the Schedule B assessment itself is based upon the legal assumption that the house does not form part of the farming occupation.

Forward to