Purchase Tax (Car Radios)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 20th January 1948.

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Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield 12:00 am, 20th January 1948

asked the Chancellor of the Exchequer why the Commissioners of Customs and Excise informed S. Smith and Sons (England) Limited by letter, dated 14th August, 1946, that car radios were chargeable with Purchase Tax; when did the Commissioners discover the error of this ruling; how much money was received by them in consequence of the error; and how much has been retained.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

At the date mentioned car radios were generally regarded as chargeable with Purchase Tax as "wireless receiving sets of the domestic or portable type." On 23rd May, 1947, in view of certain doubts that had been expressed, the Commissioners advised the Society of Motor Manufacturers and Traders, Ltd., that they were prepared to regard these sets as outside the scope of this heading. The question has now been settled beyond doubt by a Treasury Order; I regret that the other information sought is not available.

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield

What moral justification has the Treasury for retaining this money which was obtained by misrepresentation of the law?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

It was not obtained by misrepresentation of the law. It was paid by everybody under the belief that the law included this type. There was a doubt as to that, and the Treasury gave the benefit of the doubt to the manufacturers. Since then, the tax has not been charged.

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield

Is the right hon. and learned Gentleman aware that no reputable private firm would keep money in those circumstances?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

The hon. Member will appreciate that it would be quite impossible, even if this money were repaid, as it would have to be, from October, 1940, to trace the people who had paid it—the purchasers and not the manufacturers.

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield

Is the right hon. and learned Gentleman aware that these car radios were only sold t private individuals from the beginning of 1946, and, therefore, there is no substance in his answer? I beg to give notice that I shall raise this matter on the Motion for the Adjournment on Monday next.