Finance Act 1944

Section one of the [2 & 3 Geo. 6. c. 119.] Finance (No. 2) Act, 1939 (which imposes duties of excise and customs in respect of beer) shall have effect as if Parts I, III and IV of the First Schedule to this Act were respectively substituted for Parts I, III and IV of the First Schedule to that Act.

In the case of beer in respect of which it is shown to the satisfaction of the Commissioners that the increased duty chargeable by virtue of this section has been paid, the provisions of the said section one relating to drawback shall have effect as if Parts II, V and VI of the First Schedule to this Act were respectively substituted for Parts II, V and VI of the First Schedule to the Finance (No. 2) Act, 1939.

This section shall be deemed to have had effect as from the twenty-sixth day of April, nineteen hundred and forty-four.

Subsection (1) of section seven of the [16 & 17 Geo. 5. c. 22.] Finance Act, 1926 (which, as amended by section seven of the [5 & 6 Geo. 6. c. 21.] Finance Act, 1942, provides, inter alia, for the stabilisation of rates of imperial preference in the case of the duties of customs charged on sugar, molasses, glucose and saccharin, during a period ending with the thirty-first day of August, nineteen hundred and forty-four) shall, in so far as it relates to the said duties, have effect as if the said period were extended so as to expire at the end of August, nineteen hundred and forty-six.

The maximum quantity of sugar in respect of which quota certificates may be issued under section one of the [24 & 25 Geo. 5. c. 32.] Finance Act, 1934 (which, inter alia, provides a special preference in respect of colonial sugar), shall, as respects the financial year ending with the thirty-first day of March, nineteen hundred and forty-five, and subsequent financial years, be increased from three hundred and sixty thousand tons to four hundred thousand tons.

Notwithstanding anything in section ninety-five of the [39 & 40 Vict. c. 36.] Customs Consolidation Act, 1876, wine which the Commissioners are satisfied is vintage port may, subject to and in accordance with any regulations made by the Commissioners, be bottled for home consumption in a warehouse.

If any person contravenes any regulation made by the Commissioners under this section, he shall be liable to a customs penalty of fifty pounds and the wine in respect of which the offence is committed shall be forfeited.

The duties of excise chargeable under the [32 & 33 Vict. c. 14.] Revenue Act, 1869, in respect of armorial bearings and the [51 & 52 Vict. c. 8.] Customs and Inland Revenue Act, 1888, in respect of carriages and hackney carriages, respectively, shall cease to be chargeable, and no licence shall be required to be taken out under the first-mentioned Act in respect of the wear or use of armorial bearings or the keeping of a carriage or hackney carriage.

This section shall come into operation on the first day of January, nineteen hundred and forty-five.

Where under subsection (2) of section ten of the Finance Act, 1942, the Commissioners have certified that the business carried on in any licensed premises has been temporarily discontinued by reason of war circumstances not including the destruction of the premises or serious damage thereto, and the licence has been suspended accordingly, then if the holder of the licence satisfies the Commissioners that at any time during the suspension of the licence, whether before or after the passing of this Act, the premises have been affected by war circumstances consisting of the destruction thereof or serious damage thereto, the Commissioners shall certify accordingly ; and where a certificate is given under this subsection the provisions of the said section ten and the Sixth Schedule to the said Act shall, as respects the period after the time when the destruction or damage occurred during which the licence is in suspense, have effect as if the certificate by virtue of which the licence was suspended had certified that the war circumstances to which it related included the destruction of the premises, or serious damage thereto.

This section shall be construed as one with the said section ten.

The following section shall be substituted for section eighteen of the [3 & 4 Geo. 6. c. 48.] Finance (No. 2) Act, 1940—

Imported goods shall be deemed to be imported for a registered wholesale merchant or a registered manufacturer as stock for his business or as materials if the Commissioners are satisfied, on a representation to that effect made to them in the prescribed manner and at the prescribed time by a person claiming to be the holder of a certificate of registration, that he is the holder of such a certificate and that he intends to sell the goods or to use them as materials.

The Commissioners may, as respects any imported chargeable goods deemed in consequence of such a representation as aforesaid to be imported as aforesaid, from time to time require the person by whom the representation was made to account for the goods, and, unless he proves that he has sold the goods under a chargeable purchase or to a registered wholesale merchant as stock for his business or to a registered manufacturer as materials, or has used them as materials, or has appropriated or applied them as mentioned in section twenty-five of the Finance (No. 2) Act, 1940, or the goods are otherwise accounted for to the satisfaction of the Commissioners, the exception which had effect in consequence of the representation from the tax that apart from the representation would have been chargeable by virtue of the importation of the goods shall be deemed to have ceased to have effect on the making of the requirement, and that tax shall be deemed to have become payable thereupon and shall be recoverable as a debt due to His Majesty from that person.

In subsection (1) of section twenty-five of the Finance (No. 2) Act, 1940 (which provides for treating as chargeable purchases certain appropriations and applications by registered persons of goods acquired by them as stock or as materials) there shall be inserted, after the words " acquired under a purchase of goods as stock for his business or as materials " , the words " or which were imported for him as stock for his business or as materials ".

The consequential and transitional provisions set out in Parts I and II respectively of the Second Schedule to this Act shall have effect in relation to the provisions of this section.

Subsection (1) of section twenty-one of the [25 & 26 Geo. 5. c. 24.] Finance (No. 2) Act, 1940 (which prescribes the basis on which the wholesale value of goods in respect of which tax is chargeable is to be determined) shall have effect in relation to tax chargeable by virtue of importation to the exclusion of section ten of the Finance Act, 1935, and subsections (2) and (3) of the said section twenty-one (which relate to the determination by arbitration of questions as to the wholesale value of goods and to the deposit of tax pending a reference to arbitration) shall have effect in relation to tax chargeable by virtue of importation to the exclusion, so far as regards any such question, of sections thirty and thirty-one of the Customs Consolidation Act, 1876.

Section sixteen of the Finance Act, 1934 (which relates to the prevention of smuggling in Northern Ireland) shall have effect, in its application by virtue of subsection (1) of this section, as if references to the importation of goods were references to the importation thereof in such circumstances that tax is chargeable by virtue of the importation.

The following enactments shall be excepted from the enactments which are to have effect as mentioned in subsection (1) of this section, that is to say, section one hundred and fifty-six of the Customs Consolidation Act, 1876 (which relates to the importation of goods from the Channel Islands), and the provisions of the Schedule to the [39 & 40 Vict. c. 35.] Customs Tariff Act, 1876, and of subsection (1) of section seven of the [1 Edw. 7. c. 7.] Finance Act, 1901, as to parts and ingredients of imported goods.

Regulations made under subsection (2) of section fourteen and section fifteen of the [45 & 46 Vict. c. 74.] Post Office (Parcels) Act, 1882 (which authorise the making of provision as to the application of customs enactments to certain postal packets, and otherwise in relation thereto) may make special provision in relation to chargeable goods and to tax chargeable by virtue of importation.

As respects any period during which the Commissioners refrain under this section from registering a person who would otherwise be required by the said subsection (1) to be registered, he shall be treated for the purposes of the enactments relating to the tax, other than the provisions of subsection (2) of the said section twenty-three, as being a person not required by the said subsection (1) to be registered.

The provisions of subsection (8) of the said section twenty-three as to service by the Commissioners of notice of their intention to cancel a registration shall have effect, as respects a cancellation under this section, only where such a cancellation is effected without the assent of the registered person.

The Treasury shall have power by an order made under subsection (9) of section twenty-three of the Finance (No. 2) Act, 1940, to direct that the proviso to subsection (1) of that section (which excludes from registration wholesale merchants and manufacturers whose gross takings from sales of chargeable goods do not exceed the amount therein mentioned) shall be suspended during the continuance in force of the order, and to revoke an order made under that subsection.

In subsection (3) of the said section twenty-three (which requires a person carrying on business in such circumstances that he is required to be registered to make an application for registration to the Commissioners), the following paragraphs shall be substituted for paragraphs (a) and (b) respectively, that is to say—

The Commissioners may, where it appears to them to be requisite for the security of the revenue so to do, impose, as a condition of issuing a certificate of registration to a registered person or of the continuance in effect of such a certificate issued to such a person, or as a condition of a person's having the benefit of the proviso to subsection (1) of section twenty-four of the Finance (No. 2) Act, 1940 (which relates to treating certain purchases as purchases excepted from being chargeable purchases), a requirement that he shall give security up to an amount and in a manner approved by the Commissioners for the payment of tax for which he may be or become accountable.

The fact that a person who is required to be registered is by virtue of this section not for the time being entitled to a certificate of registration shall not be treated as derogating in any respect from the effect of that requirement.

If a wholesale merchant or a manufacturer proves to the satisfaction of the Commissioners, in the case of any goods in respect of which tax has become chargeable by virtue of a purchase made from him or by virtue of such an appropriation or application as is mentioned in section twenty-five of the Finance (No. 2) Act, 1940, made by him, that tax also became chargeable in respect thereof on a previous occasion by virtue of a purchase thereof, or of such an appropriation or application thereof, made by him, or of an importation thereof effected by him at a time when he was not the holder of a certificate of registration, the Commissioners may remit payment of the first mentioned tax, or if it has been paid may repay it, up to an amount not exceeding the amount of the last mentioned tax.

If a manufacturer proves to the satisfaction of the Commissioners that he has used as materials for goods in respect of which tax has become chargeable by virtue of a purchase made from him or by virtue of such an appropriation or application as is mentioned in section twenty-five of the Finance (No. 2) Act, 1940, made by him, goods in respect of which tax became chargeable on a previous occasion by virtue of a purchase thereof, or of such an appropriation or application thereof, made by him, or of an importation thereof effected by him at a time when he was not the holder of a certificate of registration, the Commissioners may remit payment of the first mentioned tax, or if it has been paid may repay it, up to an amount not exceeding the amount of the last mentioned tax.

If any person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion, by him or any other person, of tax in respect of any goods, he shall be liable to a penalty of five hundred pounds or treble the amount of the tax, whichever is the greater, or to imprisonment for a term not exceeding two years, or to both such a penalty and such imprisonment.

If any person acquires possession of or deals with any goods, having reason to believe that tax chargeable in respect thereof has been or will be evaded, he shall be liable to a penalty of five hundred pounds or treble the amount of the tax, whichever is the greater.

Subsection (3) of section twelve of the [6 & 7 Geo. 6. c. 28.] Finance Act, 1943 (which, where in pursuance of subsection (1) or (2) of that section a person is ordered by a court of summary jurisdiction both to be imprisoned for a term and to pay a penalty, and is also ordered to be imprisoned for a further term in default of payment or satisfaction of the penalty, limits the aggregate of the two terms of imprisonment to two years) shall apply to orders of a court of summary jurisdiction made in pursuance of subsection (1) of this section as it applies to such orders made in pursuance of subsection (1) or (2) of the said section twelve.

Section seventy-six of the [7 & 8 Geo. 4. c. 53.] Excise Management Act, 1827, as applied by paragraph 1 of the Ninth Schedule to the Finance (No. 2) Act, 1940, shall have effect as if purchase tax were a duty of excise.

Income tax for the year 1944-45 shall be charged at the standard rate of ten shillings in the pound, and in the case of an individual whose total income exceeds one thousand five hundred pounds, at such higher rates in respect of the excess over one thousand five hundred pounds as Parliament may hereafter determine.

Subject to the provisions of the [6 & 7 Geo. 6. c. 45.] Income Tax (Employments) Act, 1943, and the Income Tax (Offices and [7 & 8 Geo. 6. c. 12.] Employments) Act, 1944 all such enactments as had effect with respect to the income tax charged for the year 1943-44, other than such enactments as by their terms relate only to tax for that year, shall have effect with respect to the income tax charged for the year 1944-45.

In this section the expression " Dominion income tax relief " means the relief provided for by section twenty-seven of the Finance Act, 1920.

If the period for which he was engaged on the making of the work does not exceed twenty-four months, then, for all the purposes of the Income Tax Acts, one half only of the amount of the payment shall be treated as having become receivable on the date on which it actually became receivable, and the remaining half shall be treated as having become receivable twelve months before that date.

If the period for which he was engaged on the making of the work exceeds twenty-four months, then, for all the purposes of the Income Tax Acts, one third only of the amount of the payment shall be treated as having become receivable on the date on which it actually became receivable, and one third shall be treated as having become receivable twelve months, and one third twenty-four months, before that date.

A claim under subsection (1) of this section must be made to the Commissioners of Inland Revenue not later than twelve months from the end of the year of assessment mentioned in that subsection, and section nineteen of the [15 & 16 Geo. 5. c. 36.] Finance Act, 1925 (which relates to the making and allowing of claims for certain reliefs and to rights of appeal), shall apply in relation to claims under the said subsection (1) as it applies in relation to the claims mentioned in that section.

Where, on a claim made under this section, liability to tax falls to be adjusted in accordance with subsection (2) or subsection (3) of this section, such additional assessments, reductions of assessments and repayments shall be made as are necessary to give effect to the provisions of this section.

In this section, the expression " author " includes a joint author, and the expression " lump sum payment " includes an advance on account of royalties which is not returnable.

Any sums paid in or towards the discharge of payments required by this section to be made without deduction of tax shall be chargeable under Case III of Schedule D as if they were mentioned in Rule 1 of the Rules applicable to that Case, but the tax shall be computed in all cases" on the payments falling due in the year of assessment, so far as paid in that or in any other year.

A claimant shall be entitled, in computing his total income for any year of assessment for any of the purposes of the Income Tax Acts, to deduct sums paid by him in or towards the discharge of any such small maintenance payments required by this section to be made without deduction of tax as fall due in that year, and effect shall be given to this deduction by reducing any assessment made on him or by repayment, as the case may require ; and for the purposes of section seventeen of the [8 & 9 Geo. 5. c. 40.] Income Tax Act, 1918 (which provides that relief is not to be given in respect of charges on income) any amount which can be deducted under this subsection in computing the total income of a person shall be treated as if it were income the tax on which that person is entitled to charge against another person.

In this section, the expression " persons affected ", in relation to a small maintenance order, means the person liable to make the payments under the order and any person for the time being entitled to the payments, references to the making of an order include references to the revival of an order, and references to the variation of an order include references to the making of an order changing the persons entitled to the payments thereunder.

Section one hundred and eighteen of the Income Tax Act, 1918 (which relates to the entry in books of abstracts of particulars contained in lists and statements) shall not have effect except in relation to assessments under Schedule A.

In subsection (1) of section one hundred and twenty-two of the Income Tax Act, 1918 (which requires the Additional Commissioners to cause certificates of assessments to be made out and entered in books provided for the purpose) for the words ," made out and entered " there shall be substituted the word " embodied ".

So much of sub-paragraph (2) of paragraph 7 of Part I of the Tenth Schedule to the Finance Act, 1942, as relates to the numbering of pages in each book of assessment and adding up the sums on each page shall not have effect except in relation to assessments under Schedule A.

All notices of assessment under Schedules B and D shall be prepared and issued by the surveyor.

The proviso to sub-paragraph (3) of paragraph 7 of Part I of the Tenth Schedule to the Finance Act, 1942 (which relates to the preparation in the division of the City of London of particulars of sums to be collected) shall not have effect except in relation to assessments under Schedule A.

If the expenditure is incurred before the end of the year of assessment in which the trade was set up and commenced, the five years shall be that and the next four years of assessment.

If the expenditure is incurred after the end of the year of assessment in which the trade was set up and commenced but not later than twelve months from the setting up and commencement of the trade, the five years shall be the year of assessment next following that in which the trade was set up and commenced and the next four years of assessment.

Where an asset is destroyed by fire or any similar cause, it shall for the purposes of the last preceding subsection be treated as if it had been sold immediately before the destruction thereof and any insurance moneys or other compensation of any description received by the person carrying on the trade in respect of the destruction and any moneys received by him for the remains of the asset shall be treated as if they were proceeds of that sale.

Where a deduction is allowed for any year under this or the last preceding section in respect of expenditure represented wholly or partly by any assets, no deduction shall be allowed under any provision of the Income Tax Acts other than this Part of this Act in respect of wear and tear, obsolescence, depreciation or exceptional depreciation of those assets for any year of assessment during any part of which they are used by the person carrying on the trade for scientific research related to the trade.

In this Part of this Act, the following expressions have the meanings hereby respectively assigned to them, that is to say—

• " the appointed day " means such day as Parliament may hereafter determine ;

• " scientific research " means any activities in the fields of natural or applied science for the extension of knowledge ;

• " scientific research expenditure " means expenditure incurred on scientific research ;

  references to expenditure incurred on scientific research do not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research, but, save as aforesaid, include all expenditure incurred for the prosecution of, or the provision of facilities for the prosecution of, scientific research ;

  references to scientific research related to a trade or a class of trades include—

  1. a

     any scientific research which may lead to or facilitate an extension of that trade or, as the case may be, of trades of that class ;

  2. b

     any scientific research of a medical nature which has a special relation to the welfare of workers employed in that trade or, as the case may be, trades of that class ;

• " the appropriate Research Council or Committee " means the Committee of the Privy Council for Scientific and Industrial Research, the Medical Research Council established under the Committee of the Privy Council for Medical Research, or the Agricultural Research Council established under the Committee of the Privy Council for Agricultural Research, according as may be appropriate in relation to the activities in question;

• " asset " includes a part of an asset ;

  references to the setting up and commencement of a trade and to the permanent discontinuance of a trade include references to the occurring of any event which, under any of the provisions of the Income Tax Acts, is to be treated as equivalent to the setting up and commencement of a trade or, as the case may be, to the permanent discontinuance thereof.

For the purposes of this Part of this Act, expenditure shall not be regarded as incurred by a person in so far as it is, or is to be, met directly or indirectly by the Crown or by any Government or public or local authority, whether in the United Kingdom or elsewhere, or by any person other than the first-mentioned person.

The same expenditure shall not be taken into account for any of the purposes of this Part of this Act in relation to more than one trade.

If any question arises under this Part of this Act as to whether, and if so to what extent, any activities constitute or constituted, or any asset is or was being used for, scientific research, the Commissioners of Inland Revenue shall refer the question to the appropriate Research Council or Committee for decision, and the decision of the Council or Committee shall be final.

Subject to the provisions of this section, if, in relation to any chargeable accounting period beginning at or after the end of March, nineteen hundred and forty-four, the standard profits of a trade or business are ascertained otherwise than by reference to the profits of the standard period, the standard profits shall, in relation to that chargeable accounting period, be increased by one thousand pounds :

Provided that, in relation to a chargeable accounting period which is less than twelve months, the said increase shall be proportionately reduced so as to correspond with the length of the period.

Where a deficiency of profits occurring in a chargeable accounting period beginning at or after the end of March, nineteen hundred and forty-four, is greater than it would have been if this section had not been passed, the amount of the increase shall not be available (whether under section fifteen of the Finance (No. 2) Act, 1939, or paragraph 6 of Part IV of the Fifth Schedule to the Finance Act, 1940) to reduce profits for any chargeable accounting period ending at or before that date ; but where by virtue of this subsection the whole of a deficiency occurring in a chargeable accounting period cannot be applied in reducing profits for previous chargeable accounting periods, the amount which cannot be applied shall, for the purposes of paragraph (b) of subsection (2) of the said section fifteen, be treated as part of the balance which, under that paragraph, is to be applied in reducing profits in subsequent chargeable accounting periods.

Section thirty-five of the [4 & 5 Geo. 6. c. 30.] Finance Act, 1941 (which relates to transactions designed to avoid liability to excess profits tax), shall have effect, and shall, subject to the provisions of this section, be deemed always to have had effect, as amended by the subsequent provisions of this section.

In subsection (1) of the said section, for the words " the main purpose for which any transaction or transactions was or were effected" there shall be substituted the words " the main purpose or one of the main purposes for which any transaction or transactions was or were effected ", and in subsection (3) of the said section, for the words " on the ground that the main purpose of the transaction or transactions was not the avoidance or reduction of liability to tax" there shall be substituted the words " on the ground that the avoidance or reduction of liability to tax was not the main purpose or one of the main purposes of the transaction or transactions ".

A direction under the said section thirty-five as amended by this section may be given notwithstanding that a direction has been given under that section before the passing of this Act in relation to the transaction or transactions in question or some of them :

Provided that in any case where a direction so given has, before the twenty-fifth day of April, nineteen hundred and forty-four, been cancelled or varied on appeal by the Special Commissioners, no direction given by virtue of this section in relation to the transaction or transactions in question shall affect any chargeable accounting periods ending before the first day of April, nineteen hundred and forty-four.

In this section, the expression " disposition " means an assurance of any interest in property by any instrument inter vivos or by will or codicil, and the expression " illegitimate child " does not include a person legitimated whether by the [16 & 17 Geo. 5. c. 60.] Legitimacy Act, 1926, or otherwise.

In the application of this section to Scotland the expression " disposition " means any deed or instrument, whether inter vivos or mortis causa, whereby any interest in property is conveyed or created, the expression " personal property " means moveable property, and the expression " real property " means heritable property.

The permanent annual charge for the National Debt for the financial year ending with the thirty-first day of March, nineteen hundred and forty-five, shall be the sum of four hundred and twenty million pounds instead of the sum of three hundred and fifty-five million pounds.

The Treasury may at any time, if they think fit, raise money in any manner in which they are authorised to raise money under the [2 & 3 Geo. 6. c. 117.] National Loans Act, 1939, for providing any sums required during the said financial year for the purposes mentioned in paragraph (a) or paragraph (b) of subsection (4) of section twenty-three of the Finance Act, 1928, and the amount required by the said subsection (4) to be issued from the permanent annual charge for the National Debt for the purposes aforesaid in that year shall be decreased by the amount raised under this subsection.

Any securities created and issued to raise money under the last preceding subsection shall be deemed for all purposes to have been created and issued under the National Loans Act, 1939

This Act may be cited as the Finance Act, 1944.

Part II of this Act shall be construed as one with Part V of the Finance (No. 2) Act, 1940.

Parts III and IV of this Act shall be construed as one with the Income Tax Acts. .

Part V of this Act shall be construed as one with Part III of the Finance (No. 2) Act, 1939.

Part VI of this Act shall be construed as one with Part I of the [57 & 58 Vict. c. 30.] Finance Act, 1894.

Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment, including this Act.

The provisions of the Fourth Schedule to this Act shall, if provision in that behalf is made by an Act of the Parliament of Northern Ireland, apply with any necessary modifications to death duties payable in Northern Ireland as they apply to death duties payable in Great Britain, but save as aforesaid such of the provisions of this Act as relate to matters with respect to which the Parliament of Northern Ireland has power to make laws shall not extend to Northern Ireland.

The enactments specified in Part I of the Fifth Schedule to this Act are hereby repealed to the extent mentioned in the third column of that Part of that Schedule as from the passing of this Act, and the enactments specified in Part II of that Schedule are hereby repealed to the extent mentioned in the third column of that Part of that Schedule as from the first day of January, nineteen hundred and forty-five.