§ 66. Mr. Arthur Lewisasked the Chancellor of the Exchequer what is the practice of the Inland Revenue in recovering arrears of Income Tax in cases where persons owing large sums declare themselves bankrupt and decline to pay arrears of many years standing and afterwards sign contracts for personal income worth almost as much as the defaulted tax arrears; and to what extent the Inland Revenue reclaim the arrears on these new earnings.
§ Mr. DiamondArrears of tax up to the time of the bankruptcy are provable in the bankruptcy proceedings. Any available assets are distributable by the trustee among the creditors, including the Inland Revenue, in the due order of priority. Such assets include any amounts payable out of the bankrupt's current earnings either voluntarily or under an order of the Court under Section 51 of the Bankruptcy Act, 1914.