Finance Public and Private
Safeguarding the Taxpayer
IF the Government and the Inland Revenue authorities are wise, they will not ignore the protests which have been made against the attempts which, it is maintained, are being made, apparently on the initiative of the Inland Revenue Department, to abolish the system of General Commissioners and assessors of Income Tax. At present, as may or may not be generally known to the small taxpayer, the public has the right to be assessed for its Income Tax by an unofficial body known as the General Commissioners, and to that body he Or she is always able to appeal, as to an independent quarter, distinct from the officials of the Inland Revenue Depart- ment, whose quite proper zeal has to be - Concentrated upon securing the maximum-amount of revenue for the Exchequer. It may be recalled that some _eight years ago the proposal was put forward by the Inland Revenue authorities that the General Cmfinnissioners shOuld be abolished, but their suggestion was turned down by the Royal Commikion on Income Tax, which biidy, however, with apparent inconsistency, recommended at the same time that the assessors, who are, of course, the practical assistants of the General Commissioners, should -be done away with. : That recommendation was embodied in the Revenue Bill of 1921, but it was not passed by the House of Commons. • - ,z' .:..;-. ,.-. r_LNDAm,ERING- THE COURT OF APPEAL.
If only in view- of the-heavy burden of the Income Tax; the complicated character of the forms whieh have to be lilled in, and- the 'inquisitorial and arbitrary methods adopted by some—by no means -all—of the Inland Revenue officers, it isscarcely surprising-that the public statement recently made by Mr. Laffan, the president of the National Association of Assessors and Collectors of Taxes, should have aroused anxiety in the minds of the taxpayer, and that the apprehensions are well grounded is seen by the fact that by clauses in last year's Finance Act which escaped general attention at the time, the Inland Revenue authorities have secured the transfer of part of the assessors' work to the Inspectors of Taxes. Briefly, therefore, the position would seem to be that unless the present protests are made effective, the taxpayer is in danger of having no kind of Court of Appeal or buffer between himself and the demands of the Inland Revenue, other, of course, than the ordinary legal appeal which is both harassing and expensive.
EVADERS OF INCOME TAX.
Nevertheless, it would be well, perhaps, that the whole subject of the relations between the direct taxpayer and the Inland Revenue Department should be viewed as calmly and impartially as possible, because, like most controversial matters, there is something to be said on both sides.- It has sometimes been said that to obtain an adequate knowledge of the propensity on the part of the public for evading financial obligations to any powerful corporate body, it is necessary to become either an official in the Inland Revenue Department or a high official in Ine of the big railway companies. Personally, I have I always inclined to the belief that the evaders of Income 1 Tax and those who desire to commit large or petty frauds Upon the railroads are very few in number. In quarters, however, which should be better informed, I am assured that such is very far from the case, and for many of the irritating demands on the part of the railroads for examination of tickets, etc., and for the inquisitorial and arbitrary methods of the Inland Revenue Authorities, the evasions of a dishon-est section of the community must largely be held responsible. After all, so long as 'natters are not carried too far, the officials of the Inland Revenue Department are only showing a proper zeal in the performance of a public duty in endeavouring to collect the maximum amount 'OT re-Venue.
JUSTIFIABLE EXACTIONS.
Not only so, but apart altogether from any desire to defraud- the-Revemre, the taxpayer, who doubtless should be better informed, may occasionally require a reminder of the precise character of the law as affecting income on which Income Tax can properly be claimed. I recall, in my own case, an instance many years ago where I should have omitted an item in my -own return (which doubt- less should have occurred: to me; but did not), but for the promptness of the local Inspector, and I only mention it as affording one of doubtless many cases where due thought is required in making out the return. I had let -my_ house for a -period of six months and had taken a furnished house in the country at a considerably higher figure than I was -receiving as temporary rent for my permanent residence. As it seemed- to me, in a hasty calculation of the matter, I was materially out of pocket by the transaction and, therefore; should probably not have made any mention of the transaction in my return. I soon had a prompt reminder, however, from the zealous local Inspector of Taxes that, having let my residence for a period, I Avis-i•equired to return under the head of " Income " the rent I had reeeived, and subsequent correspondence enlightened-me as to the fact that I was not entitled to filaee on the other' side the rent paid in the interval for the furnished house. Of course, a xnoment's reflection showed that the point was a proper and fair one, because, after all, the payment for the furnished house was in _ no sense a' proper expenditure chargeable against revenue in the matter of income tax return, while the profit on the letting of my perma- nent residence, after deducting the actual rent paid to the owner of the property, was actual income. Even here again, however, the fairness of the Inland Revenue Authorities was shown, for it was duly pointed out that I might make what deduction from rent I considered was fair as regards possible wear and tear on furniture during the time my house was let In fact, whatever may be the charges against inquisitorial methods on the part of the officers of the Inland Revenue Department, no one will question their proper zeal, their desire to act fairly, and their thoroughly expert knowledge of the complexities of the income tax law.
"TECHNICAL COMPLEXITIES."
Such being the case, however, it is rather difficult to understand why the Inland Revenue Authorities should seek to pursue a course which might well call into ques- tion the desire on the part of the authorities to exact no more from the taxpayer than the fair and proper amount of tax. Moreover, in a letter addressed to the Times by Mr. Houghton, the General Secretary of the Association of Officers of Taxes, a sentence occurs which, in itself, would seem more firmly to establish the need for the services of the assessor and the right of appeal to the General Commissioners. Mr. Houghton affirms that "the technicalities and complexities of present income tax law are quite beyond the capacity of a band of officials who are appointed locally, but have no income tax training and, generally speaking, have only a super- ficial knowledge of the finer points of the income tax law." Commenting upon this observation, the City Editor of the Times says : " If these complexities and technicalities are beyond the capacity of officials who have spent their life at the work, then obviously they must be beyond the capacity of the average taxpayer, who has none of the opportunities nor even the time to understand them."
IGNORANCE AND IRRITATION.
Here, I think, we get at the root cause of much of the irritation . occasioned to the great mass of taxpayers all over the country with regard to the burden of the InCome Tax. Those who have a sufficient income to make it worth their while to engage the services of the practical expert in making up their returns not only do so with probable profit to themselves, but certainly at the loss of much labour and irritation occasioned by the complex character of the forms and the possible correspondence which follows. To the business man, with his staff of clerks, the filling- up of forms and the conduct of the correspondence is, after all, only a matter of ordinary routine, but to the small private individual- Who possibly keeps no formal books of accounts, and to whom the technical terms employed in the forms are meaningless, the procedure which has to be gone through in making out the return or in claiming rebates from the Inland Revenue Authorities constitutes almost a nightmare.
THE RANKER TO THE RESCUE.
Instead, therefore, of any abolishment of impartial Commissioners in the matter of Income Tax, what would seem to be required is some simpler method by which those who find difficulty in making out their income tax returns or who have reason to feel that they have been overcharged—that is over-assessed--can quickly obtain advice from competent and impartial quarters. In that connexion, however, and at the risk of adding to the labours of the already over-burdened banker, I cannot help thinking that all small income tax payers who have banking accounts—and they must constitute the majority —would find that their bankers are always willing and are most certainly competent, to give the necessary advice to all who find difficulties with their income tax returns or with the reclaiming of sums which may be due to them from the authorities.
ARTHUR W. KIDDY.
Previous page
