WEDNESDAY, FEBRUARY 16, 1977
6
THIS WOULD, IN EFFECT, BE A RE-INTRODUCTION OF THE SO-CALLED WORKING WIFE'S ALLOWANCE WHICH WAS REPEALED IN 1973-74. THE COMMITTEE HAS RECOMMENDED THAT THE ALLOWANCE, WHICH WAS PREVIOUSLY ONLY AVAILABLE IN RESPECT OF SALARIED WIVES, SHOULD ALSO APPLY WHERE WIVES DERIVE PROF ITS FROM A BUSINESS OR PROFESSION.
THE COMMITTEE FELT THAT ANYTHING LIKE A COMPLETE SEPARATION OF THE INCOMES OF HUSBAND AND WIFE WOULD RESULT IN A CONSIDERABLE LOSS OF REVENUE AND WOULD LEAD TO A RELATIVELY HIGHER TAX BURDEN FOR THOSE HUSBANDS WHO ARE THE ONLY INCOME EARNERS OF THEIR FAMILIES.
IN RECOMMEND ING THE RE-INTRODUCTION OF THE WORKING WIFE'S ALLOWANCE, THE COMMITTEE FELT THAT THIS WOULD ENCOURAGE TRAINED MARRIED WOMEN BACK TO WORK FORCE AND WOULD ALSO RECOGNISE THE ADDITIONAL EXPENDITURE INCURRED WHEN BOTH HUSBAND AND WIFE ARE EMPLOYED. IT FURTHER RECOMMENDED THAT TO PRESERVE ITS RELATIVITY THE ALLOWANCE SHOULD BE SET AT A FIXED PERCENTAGE OF THE PERSONAL ALLOWANCE.
8. THAT THE EXISTING TREATMENT FOR SALARIES TAX PURPOSES OF
BENEFITS IN KIND SHOULD, WITH CERTAIN MINOR EXCEPTIONS, BE
MAINTAINED,
THIS WOULD MEAN THAT WITH THE EXCEPTION OF THE VALUE OF QUARTERS, BENEFITS IN KIND WHICH CANNOT BE CONVERTED INTO MONEY WOULD REMAIN OUTSIDE THE CHARGE. THE COMMITTEE FOUND THAT A SYSTEMATIC EXPLOITATION OF THIS TAX-FREE AREA DOES NOT OCCUR ON ANY SIGNIFICANT SCALE AND THAT BECAUSE OF THE PRACTICAL DIFFICULTIES OF QUANTIFYING THE BENEFITS THE ONLY EXTENSIONS WHICH IT COULD RECOMMEND WERE-
(A) CASES WHERE THE EMPLOYER MEETS THE COSTS OF ELECTRICITY, GAS AND WATER BILLS AT THE EMPLOYEE'S RESIDENCE- AND
(B) CASES WHERE THE EMPLOYER SIMILARLY MEETS CHARGES OF INDOOR
AND OUTDOOR SERVANTS.
IN CONSIDERING BENEFITS IN KIND, THE COMMITTEE GAVE ITS ATTENTION TO THE EXISTING VALUATION OF FREE QUARTERS SUPPLIED BY EMPLOYERS AND FELT THAT AS THE EXISTING PERCENTAGE (10%) WAS INTRODUCED AS RECENTLY AS 1975, IT WAS NOT INCUMBENT ON IT TO ATTEMPT ANY REAPPRAISAL OF THE SOCIAL COMPARISONS WHICH WERE EVALUATED IN FIXING THAT LEVEL.
THE COMMITTEE DID, HOWEVER, MAKE A SPECIFIC RECOMMENDATION FOR OVERCOMING ONE WEAKNESS IN THE SYSTEM. THIS OCCURS WHEN DIRECTOR- CONTROLLED COMPANIES AVOID OR MINIMISE SALARIES TAX ON THE VALUE OF QUARTERS PROVIDED TO DIRECTORS BY KEEPING THEIR SALARIES ARTIFICIALLY LOW AND BY PERMITTING THE DIRECTORS TO TAKE A PROPORTIONATELY LARGER AMOUNT OF PROFITS BY WAY OF DIVIDENDS.
IT ALSO EXPLORED OTHER IMPORTANT AREAS, SUCH AS THE DEDUCTION OF EXPENSES AND THE DEGREE OF PROGRESSIVITY IN THE SYSTEM WHERE FOR VARIOUS REASONS IT MAKES NO RECOMMENDATIONS FOR CHANGES.
/IN MAKING