INCOME TAX 
CHAPTER 1 
CAUSES OF OVERCHARGE 
Errors and overpayments are usually due to two 
causes—first, the incorrectness of returns, and, second, 
the fact that a large proportion of incomes generally 
are not paid for direct to the Revenue by the persons 
receiving them, but come through third persons, 
tax being deducted in the transfer. 
To prevent loss, the law charges all income, so far 
as possible, at its origin. Thus, a Public Company 
may have a thousand shareholders, of all degrees of 
wealth; perhaps a millionaire or two, several whose 
incomes run into thousands, a large number of fairly 
well-to-do persons, and, at the other end, some very 
poor persons who own only one share each, and whose 
entire incomes are perhaps less than £100 a year. If 
the Company makes a profit of £50,000 a year, the 
Revenue makes one assessment of £50,000 on it, and 
charges tax on the whole amount at the highest 
current rate. It is impossible for the taxing authori- 
ties to inquire into the circumstances of each of the 
shareholders and collect tax on their aggregate real 
liability. The result is that the Company is forced to 
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