HC Deb 02 June 1961 vol 641 cc46-8W
Sir C. Mott-Radclyffe

asked the Chancellor of the Exchequer if he has considered a recent decision of the Special Commissioners in an appeal under Section 66 of the Income Tax Act, 1952, to which his attention has been drawn by the hon. Member for Windsor; and whether he has any proposal for a change in the law as a result of that decision.

Sir E. Boyle

I have considered this matter and I am satisfied that the existing law is satisfactory. Section 66, Income Tax Act, 1952, provides that a person who has paid tax charged under an Income Tax assessment under Schedule D or Schedule E may claim relief if he shows that the assessment was excessive by reason of some error or mistake in the return or statement made by him for the purposes of the assessment. No relief is due, however, if the return or statement was made on the basis or in accordance with the practice generally prevailing at the time when it was made. A dispute between the Revenue and the taxpayer on a Section 66 claim falls to be determined on appeal by the Special Commissioners, whose decision, except on a point of law arising in connection with the computation of profits or income, is final. In the case to which my hon. Friend refers, the appellate Special Commissioners decided, in favour of the Revenue, that the taxpayer's return had been in accordance with prevailing practice; but they went on to say, in effect, that, apart from this, the taxpayer could not invoke Section 66 because the assessment was an estimated assessment made in advance of a return or accounts, despite the fact that the assessment had been adjusted in accordance with accounts subsequently submitted. This second limb of the decision did not accord with the practice of the Board of Inland Revenue, and the Board is now advised that where a return or accounts submitted after the making of an estimated assessment have been accepted for the purpose of arriving at the final assessment under which the tax has been charged, the fact that the assessment was made in advance of the rendering of the return or accounts does not of itself rule out a claim under Section 66 which would otherwise be admissible. The Board will continue to adopt this general line in considering claims under the Section, and will make its view clear to the appellate Commissioners if the point is raised on an appeal before them.