Statutes
| Published date | 01 April 1948 |
| Author | A. Farnsworth |
| DOI | http://doi.org/10.1111/j.1468-2230.1948.tb00085.x |
| Date | 01 April 1948 |
S
'I'
A
T
IJ
'I'
13
S
TEE
FINANCE ACT,
1047,
AN!)
THE
FINANCE (NO.
2)
ACT,
1947
PERHAPS
the most striking feature of the first Finance Act of
1847
is its inordinate length-well over one hundred pages-due, it
is
true, in part to the complexity of the subject-matter but attribu-
table in part, it is feared, to the unfortunate tendency in recent
years for the parliamentary draftsman
to
exprcss in detailed words
involved mathematical formulae and also to make his clauses
fool-
proof against thc ingenuity of the
'
tax evasion' expert, be he
lawyer
or
accountant.
The most noteworthy alteration in the Customs and Excise
provisions was a huge increase in the tobacco duty, though the
Chancellor yielded to parliamentary pressure in giving relief
to
old-age pensioners for their own
'
smokes (section 8). The
Treasury was given power to make orders heavily taxing imported
Alms
(section
7),
thereby relieving the drain on our dollar supply,
while there were minor alterations in the purchase tax provisions.
In the realm of income tax we may note increases in the earned
income relief, to one-sixth with
a
maximum allowance of
€250,
and of the child allowance, which was restored
to
its pre-war level
of
€60
;
the effect of these reliefs should
be
to exempt about half a
million persons from the tax this year. The remainder of the post-
war credits were released to elderly people (seetion
16)
but perhaps
the most important change under this head mas the new code
(sections
10-28)
relating to retirement and other benefits for
directors .and employees. These sections were the result of certain
'
taxevasion schemes by which corporate bodies had provided
'
retirement
'
benefits for their directors, etc., which were not in
the nature of true superannuation but consisted, in one form
or
mother, of non-taxable lump sum payments. Very broadly this
code prescribes that annual payments-or the annual equivalent of
lump
sum
payments-made by the company shall
be
treated aa
income
of
the employee chargeable under Schedule
E.
Statutory
and ccrtain other
'
approved superannuation schemes are
exempted from the operation of the penal section (section
10).
The
Ninth Schedule amends the law relating
to
the recent 'Double
Taxation Conventions
'
entered into between the United Kingdom
and certain other countries, while farmers are given, at their
election,
a
special basis of assessment
for
their profits arising
from
production herds (Tenth Schedule).
The existing law relating to the profits tax was drasticnlly
altered by Part
IV
of the Act which introduced
a
differential
element into the assessment of profits by charging those which were
218
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