INCOME TAZ

331

The form of return (No. 46 or 46a) requires the amount of
salary, &c., for the year of assessment and the amount of
commission and other variable emoluments for the previous
year to be stated. The statutory basis of liability is the
amount of the total remuneration for the year of assessment,
but it is a common and convenient practice to assess on
the basis of the fixed salary of the year plus the variable
emoluments of the preceding year.

So far as concerns cases where income tax is paid by the
company, the amount so paid is regarded as additional
income and assessable to tax. The total sum to be charged
is, therefore, a little difficult to calculate; the exact mathe-
matical course is not followed, but in practice the following
1s approved:

For the first year the assessment is upon a salary
plus the tax thereon; for the second year, upon the
salary plus the tax on the assessment of the previous
year, and so on. So that for some years the taxpayer
has a slight advantage, and where the salary is an in-
creasing one this advantage is more marked.

Generally speaking, the tax paid by the employer is the
duty charged on the remuneration after allowance of any
abatements or relief granted to the employee, and is not
calculated at full rate on the salary paid.

Such income tax paid on salaries and assessed under
Schedule E should be claimed as a deduction under Schedule
D, and does not come within the general rule as to disallow-
ance of income tax.

In completing the return under Schedule E it is well to
compare the details with those sent in in the previous year,
and wherever remuneration has increased, to give a note
showing the rate of change, e.g. £300 to £350, and the date
from which it operates. Similarly, in the case of new names
for employees who were engaged during the preceding year,
and since the former return was made, it is convenient to give
the date of engagement and rate of salary, and, if possible, the
address of previous employment from which the employee
came. In the case of those who have disappeared from the
list, the date when they went, and, if possible, where they
have gone, should be entered.

This may seem to involve a great deal of work that is not
actually called for, but it will be generally found that it is
less trouble to do it while the main question is under con-
sideration, and that a good deal of miscellaneous corre-
spondence between the Revenue and the secretary at odd