§ Brigadier-General CHARTERISasked the Chancellor of the Exchequer what proportion of the revenue from Income 241W Tax is derived from earned income and what proportion from unearned income; and what would be the effect on tie total revenue if the basic rate for earned income were assessed at 2s. and on unearned income at 4s. in the £?
§ Mr. CHURCHILLIt is provisionally estimated that, of the net produce of Income Tax for the current year, 29 per cent. will be derived from earned income and 71 per cent. from investment income. As regards the second part of the question, I do not think that my hon. and gallant Friend's proposal could be grafted on to the existing system of differentiation and graduation without other major changes. I am, therefore, unable to forecast its effect on the Revenue.
§ Major COLFOXasked the Chancellor of the Exchequer whether he is aware that the Commissioners of Inland Revenue are in the habit of refusing to refund Income Tax which has been deducted at the source at a rate greater than the rate allowed by the Finance Act for the time: being in force; and whether he will issue instructions to refund all tax paid in excess of that authorised by Parliament?
§ Mr. CHURCHILLMy hon. and gallant Friend appears to have overlooked Section 29 of the Finance Act, 1924, which provides that repayments of Income Tax for any year of assessment in respect of personal allowances, etc., are to be made by reference to the standard rate of tax in force for that year. I may add that under the proviso to the Section, a taxpayer who has no taxable income and is, therefore, exempt from Income Tax, is repaid the whole amount of the tax paid by him, whether by deduction or otherwise.