Finance Bill

Part of the debate – in the House of Commons at 12:00 am on 5 June 1962.

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The circumstances of most offices or employments are not such that any difficulty arises, nor is there any hardship caused in these cases, I think, by the operation of the existing Schedule E rule. I think it is in the cases of professional employment or offices of a professional nature that the difficulty arises. Again the Royal Commission did draw this out very clearly in paragraph 135 when it said that there are many offices and employments the true obligations of which are not capable of being precisely defined. It was to that difficulty that the Royal Commission specifically directed its attention and its criticism, and it is this problem which has been dealt with partially by the 1958 Act. There was a Minority Report of the Royal Commission which did not support the view that such an amendment should be made to the Schedule E rule. I think I ought to point out that in the debate of 1957 the hon. Member for Sowerby (Mr. Houghton) found himself in opposition to the views which have been expressed this evening on the necessity of amending the Schedule E expenses rule, He said, There is no doubt that there is a problem here, but I think that my hon. Friends and I would agree with the Financial Secretary that the Royal Commission has not found the answer. On that occasion, at any rate, he thought that he had the support of the hon. Member for Itchen in not approving the proposal of the Royal Commission, but it has been put forward in a wider form this evening. The hon. Member for Sowerby, whose knowledge of these matters is far more extensive than mine and whose experience is very great in matters of this sort, went on, There is no doubt that from the administrative point of view to have to apply a formula which refers to expenses reasonnably incurred for the appropriate performance of the duties of the office is to open up a limitless range of argument and difficulty. One of the virtues of the rules under both Schedule E and Schedule D at present is that they require the expenditure to be wholly and exclusively incurred in something, one in the course of trade and the other in the performance of an office. To say that expenditure shall be admitted if reasonably incurred in the appropriate performance of an office seems to me to add to the difficulties of interpretation and application rather than to lessen them.