Statutes
| Date | 01 December 1943 |
| Published date | 01 December 1943 |
| DOI | http://doi.org/10.1111/j.1468-2230.1943.tb02881.x |
| Author | A. Farnsworth |
STATUTES
229
STATUTES
The
Finance
Act,
1943
This Act is mainly confined to rounding off administrative di5icultie.s
and inequities experienced in the working of the Income and Excess
Profits Tax provisions of earlier Finance Acts; there were,
as
usual,
increases in indirect taxation. The conditions for obtaining Income
Tax allowances for housekeepers and dependent relatives were made
easier, while Section
20
of the Act removed doubts that had
been
expressed
by the Court in Lord Herbert v.
Inland
Revenue
(1g43),
I
All E.R.
336.
Section
20
of the
~gzz
Finance Act, Section
21
of the
1936
Act, and
Part
IV
of the
1938
Act form
a
code wherewith
to
avoid the effect of legal
evasion of tax by means of settlements and dispositions. In
Herbert’s
case-actually decided on another point-the view was expressed that this
code did not apply to settlements where there was more than one settlor
;
Section
20
of this year’s Act together with the Sixth Schedule establish
that the earlier legislation referred to above
has
always applied
to
cases
of joint settlors and enact, in brief, that each settlor
is
to
be
dealt with
as
though he were the only settlor and only as regards property or income
originating from him.
The Excess Profits Tax provisions give further relief to concerns with
wasting assets, but their main interest lies in Section
23
aimed mainly at
the “whisky ramp” of which
so
much was made in the lay Press; briefly
this was effected by control of a company being obtained and its stock sold
at pre-war prices to a speculator who resold at full war-time values, often
paying large sums as commission, in such a way that none of the persons
concerned in, or benefiting from, the transactions became liable to the
tax. The Section, in short, gives power to the Inland Revenue to charge
the full Excess Profits Tax that would have been due
if
the trading
stock
had been sold by the company in the
first
instance for the full market
value; further power is given to charge, jointly and severally, all the
persons who have financially benefited from the scheme. Professional
men, i.e. barristers, solicitors or accountants, who have assisted in such
schemes are specifically exempted from the provisions of the section
if
they have only charged the customary
(sic)
rate in the profession for the
services rendered by them
;
strong objection was rightly raised in Parlia-
ment to the relief thus given to the very persons without whose help
these “evasion” schemes could not
be
effected.
The remaining provisions of the Act are not of general interest, though
it
is worth noting that penalties are imposed for
false
returns for Excess
Profits Tax, and that the penalties in regard to offences in relation to
Customs and Excise and the Purchase Tax are increased, including the
right to impose both a monetary penalty and imprisonment.
A.
FARNSWORTH.
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