Wage-Earners (Income Tax)

Oral Answers to Questions — National Finance – in the House of Commons on 20th October 1942.

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Photo of Mr Irving Albery Mr Irving Albery , Gravesend

asked the Chancellor of the Exchequer whether he is aware that the directing of men to other employment in the national interest has resulted, in some cases, in lowering their earnings, which will result in hardship in the payment of Income Tax; and will he consider any suitable action in the next Budget?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I would remind my hon. Friend that the scheme for deduction of Income Tax from wages contains provision for deferring deduction of part of the taxes payable where, for any week when earnings are relatively low, the full deduction would be unduly heavy. Under the regulations that have been made, the wage-earner is able to secure that the periodical deductions of taxes shall not be such as to reduce the wages paid for that week below certain limits which vary according to whether the taxpayer is married and the number of his children or dependants. These limits are set out in the "Deduction of Income Tax (Schedule E) (Amendment No. 3) Regulations, 1942" (S.R. & O.,1942, No. 1324).

Photo of Mr Irving Albery Mr Irving Albery , Gravesend

Is my right hon. Friend aware that in some cases wages have been reduced by as much as one-third—for instance, from £6 to £4—and that the mitigation to which he has referred will be no adequate compensation for reductions of that kind, when the men have to meet the tax on earnings of £6 out of a wage of £4?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I think my hon. Friend is under a misapprehension in this matter. If he will give me particulars, I will examine them and send him a correction.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

Could not the Chancellor get out of the difficulty by adopting the admirable suggestion that Income Tax should be collected out of the pay in the actual week in which the wage is earned?