Income Tax and Excess Profits Law (Simplification).

Oral Answers to Questions — National Finance. – in the House of Commons on 10th March 1942.

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Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

asked the Chancellor of the Exchequer whether, having regard to the war-time increase in the number of Income Tax payers from 800,000 to some 9,000,000, and to the complexities of the present Income Tax Acts, he will introduce new legislation upon the matter as was done during the last war; and whether he will make use of the draft of a simplified Income Tax Act which was part of the report of the Committee for the simplification of these Acts which was appointed by the Chancellor of the Exchequer in 1927 and, after nine years work, reported in 1936?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I fully appreciate the considerations which my hon. Friend has in mind, and I recognise the importance of a complete codification of the Income Tax law as soon as it is practicable. I am afraid, however, that in view of the labour involved, it is impossible to undertake so considerable a task at a time like the present.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

Is my right hon. Friend serious in making that reply, because this report was in the hands of the Department in 1936? Is it not the case that if it had been given proper attention, the Chancellor would have had a very much easier job in war-time, especially now that so many working-class people have to pay Income Tax?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I am not aware of the circumstances at the time to which my hon. Friend referred.

Mr. De la Bère:

The answer does seem unreal, and it is unreal.

Photo of Sir Edward Keeling Sir Edward Keeling , Twickenham

asked the Chancellor of the Exchequer whether he will consolidate and simplify in the next Finance Bill the law regarding Excess Profits Tax?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

The provisions of the Excess Profits Tax are necessarily complicated and I doubt if they are susceptible of such simplification as my hon. Friend would desire. In existing circumstances, when the pressure of business is so heavy, I am afraid this would not be possible.

Photo of Sir Edward Keeling Sir Edward Keeling , Twickenham

Will my right hon. Friend answer my Question about consolidation?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

There is the same difficulty there.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

Is my right hon. Friend aware that the operation of the Excess Profits Tax is putting companies into a position that, when the war is over, they will not be able to function at all?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

That is a question of opinion.

Photo of Sir Edward Keeling Sir Edward Keeling , Twickenham

Is my right hon. Friend aware that the House is at all times willing to pass a Consolidation Bill?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

The work would have to be done, though.

Photo of Sir Edward Keeling Sir Edward Keeling , Twickenham

asked the Chancellor of the Exchequer whether he is aware that Sections 25 to 27 of the Finance Act, 1941, which necessitate calculating 20/29ths of many sums of money, give a great deal of work to depleted accounts staffs; and whether he will consider an alteration of this fraction to two-thirds?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

The legislation to which my hon. Friend refers provided that a tax-free payment of any given amount should be satisfied by the same gross income as was required before the war when Income Tax was 5s. 6d. in the £. With Income Tax at 10s. this involves the reduction of the tax free payment to 20/29ths of its pre-war figure. I should not feel justified in substituting the simpler fraction named by my hon. Friend, which would reduce the payment to a greater extent than is required for the purpose stated.

Photo of Sir Edward Keeling Sir Edward Keeling , Twickenham

Can my right hon. Friend say what amount he thinks is involved? It cannot be very big.

Photo of Mr Campbell Stephen Mr Campbell Stephen , Glasgow Camlachie

Will the Chancellor consider getting some school-boys to give their services to those firms?

Photo of Mr William Thorne Mr William Thorne , West Ham Plaistow

Will the Chancellor give a guarantee that the Income Tax will remain at 10s. 0d. in the £?