§ Lieut.-Colonel Sharpasked the Chancellor of the Exchequer what action he has taken, or proposes taking, to implement the recommendations of the Select Committee on Estimates for improving the administration of the P.A.Y.E. system of taxation.
§ Mr. DaltonThe Committee record the various relaxations of work which had been sanctioned up to the date of their 65W Report, and I have since taken further action to reduce the pressure of work. As I stated, in reply to the hon. Member for Islington, East (Mr. E. Fletcher) on 1st August, I have authorised the Board of Inland Revenu to abandon, for each of the years 1944–45 and 1945–46, the "check up" or work of formal assessment at the end of the year for all P.A.Y.E. taxpayers (other than certain exceptional classes) who paid less than £175 tax for the year. This work of assessment has, therefore, been saved in no less than 8½ million cases each year. I have also authorised the Inland Revenue, in cases where arrears of tax, due at the end of the year 1945–46, would normally be added to the tax for subsequent years, to set such arrears off against the Postwar Credit for the year 1945–46, the final year of Postwar Credits. This will both save departmental work, and be of convenience to the taxpayer. As a result of these measures, the arrears of work, which stood at about six months when the Committee considered the matter, have now shrunk to about three months. I hope for further improvement, though the repayments of Postwar Credits to the aged under this year's Finance Act, are, of course, making new and additional demands upon the Department's staff.
As regards accommodation and equipment, difficulties of supply still remain. But, with the co-operation of the Ministry of Works, steps are now being taken to remedy the worst cases of over-crowding and to improve office equipment. On the training of staff, the Committee, though they mention the matter in their report, took no evidence from the Board of Inland Revenue. I have now instructed the Board to inform the Committee of the action already taken in this sphere, and, in particular, of the opening of schools for the intensive training of men and women who have returned from the Forces. These schools have been judged by outside authorities as producing highly successful results. On the more general question of possible improvement of P.A.Y.E., I prefer the system whereby tax is collected as earnings are made, and in due proportion to the amount of the earnings to any system which is based only on hypothetical earnings. The mechanics of P.A.Y.E. are constantly under review, and the Single Table System, which, as I announced on 66W Tuesday last, is to come into force for next year, is the latest of a number of improvements. The Board of Inland Revenue have kept, and will continue to keep, in close touch with outside expert opinion regarding P.A.Y.E., in order to lose no opportunity of improving the mechanics of the system.