§ Mr. FORRESTasked the Chancellor of the Exchequer the loss which would be caused to the revenue by the raising of the income tax level of exemption to £250; and whether he will give the cost per cent. of the collection of the income tax below and above this amount?
Mr. CHAMBERLAINI would refer my hon. Friend to the reply I gave to the hon. Member for the Penistone Division (Mr. Arnold) on the 20th May, 1919, of which I am sending him a copy. As I then indicated, the machinery of assessment and collection of the income tax constitutes an organised whole, and it is almost impossible to identify any part of the total cost with any particular class of taxpayer. It is calculated that for the year 1919–20 the total cost of the assessment and collection of the income tax and super-tax, including the cost of the services rendered by Departments other than the Inland Revenue, will be about £4,200,000 or 1.2 per cent. of the total sum collected. Prom such data as are available, it is roughly estimated that of this amount some £700,000 may be attributed to taxpayers in receipt of incomes under £250. The estimate of £8,000,000, given in the reply to the hon. Member for the Penistone Division as the amount of tax to be collected in the current financial year from taxpayers in receipt of incomes below £250, requires revision in view of the increased allowances for wife, children, etc. introduced by the Finance Act, 1919; the amount is now estimated at about £7,000,000. The cost of collection and assessment in the case of this class of taxpayer is therefore, on the foregoing estimates, 10 per cent. of the tax collected.