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the absence of a rack rent, then the poor rate is the usual

basis of assessment (y). Schedule B.-Touches income derived from the use of land, as in

farms, nurseries, market gardens, hop gardens, &c.
The basis of assessment (y) is one half the real or annual
value in England, and one-third in Scotland and Ireland.
The farmer may now choose to be assessed under Schedule

D in preference to Schedule B.
The occupier pays the tax (2) under both Schedules A and B,

and, if a tenant, he subsequently deducts the tax under

Schedule A from the next payment of rent to his landlord. Schedule C.-Touches income from ividends of Public Funds,

and the tax is deducted from the dividends when paid. Schedule E.-Touches income of persons in the employment of

the State, Corporations and public bodies. Schedule D.—The most interesting to the Manufacturer, touches

income from Trade, Manufacture, Profession, Employment or Vocation and any income not included in the other schedules. The assessment is based upon a return of income required, by notice, from the taxpayer. Much of the information necessary in preparing accounts for the return may be obtained from the printed rules and

regulations on the form annexed to the notice. The duty on Professions, Trades, Employments or Vocations is charged

on the average profits for the three years preceding the year

of assessment (a). The duty on Quarries, Ironworks, Gasworks, Waterworks, Canals,

Railways, Tolls of Fairs, Markets, and other concerns of a

like nature is charged on the profit of the preceding year. The duty on Mines is charged on the average profits of the five

years preceding the year of assessment, but relief is granted

when the mine fails, either wholly or partially. If any of the above sources of income under Schedule D have commenced within the respective terms which form the basis of assessment, the profit is averaged from the period of commencing.

In estimating profits under Schedule D. DEDUCTIONS ARE ALLOWED(i.) For Repairs to Premises occupied for the purpose of trade,

(capital expended in improvements to premises is not allowed, see below).

(y) Assessment ander Schedules A and B is made triennially. Under the Customs and Inland Revenue Act (Finance Act), 1894, a deduction of one-eighth of the gross rental is allowed in respect of lands (inclusive of Farm Houses and Buildings) and of one-sixth in respect of houses.

(2) In the case of dwelling houses less than £10 per annum in value, or of houses let in tenements, or land let at a less period than one year, the tax is levied on the

owner.

(a) Profits made abroad are chargeable if the party receiving them resides in the United Kingdom.

(ii.) For the Supply or Repairs of Implements, Utensils,

or articles employed, not exceeding the average sum

usually expended. (iii.) For Depreciation of Plant or Machinery–as to other

items of depreciation, see below). A fixed rate at which depreciation is to be calculated' is usually determined by the Commissioners of the district, and this rate is adhered to at all appeals, notwithstanding that more or less may

have been charged by the appellant. (iv.) For any Average Loss not exceeding the actual amount of

loss after adjustment (e.g., under a contract of insurance). (v.) For the Rent or Value of any Dwelling House or

Domestic Offices used for the purpose of any trade or profession, such sum not exceeding two-thirds of such rent

or value as the Commissioners shall allow. (vi.) For Bad Debts ; the net loss-Doubtful Debts may be

estimated. A trade embezzlement is not allowed as a

deduction. (vii.) If a business is carried on in premises belonging to the firm

the Assessment under Shedule A may be deducted.

NO DEDUCTIONS ARE ALLOWED(i.) For loss not connected with, or arising out of Trade, &c.,

or on account of capital withdrawn therefrom, or for any

sum employed, or intended to be employed therein. (ii.) For capital employed in Improvement of Trade Premises.

(As to Repairs, see above). (iii.) For Depreciation of Buildings, Premises, or Leases.

(As to Plant and Machinery, see above). (iv.) For Interest on Capital (b) employed in the Trade or for

any Annual Interest, Annuity, or other Annual Pay.

ment, payable out of profits. (v.) For Royalties (6). (v1.) For any sum recoverable under an Insurance or Contract of

Indemnity. (vii.) For any Disbursements which shall not be money wholly and

exclusively laid out for Trade, &c., or any disbursements or expenses of maintenance of parties, their families, or establishments, or any other domestic or private purposes, distinct from the purposes of Trade ; in other words, for

Principals' Salaries and Private Drawings. (viii.) For any sum paid as Income Tax on profits of any concern.

(6) Interest paid to Bankers for the Trade account is allowed, as the Banker pays the tax. Income Tax should be deducted from Interest on borrowed money, Annuities, Royalties, &c., before paying same to the parties entitled thereto.

(ix.) For Exhaustion of Minerals, sums expended in Pit

Sinking. (x.) For premiums paid for Leases. No direct power is given in the Income Tax Acts to compel the production of books and accounts in verification of the return. A surcharge may however be made, and if the taxpayer objects he can only appeal, and support his appeal by accounts. EXEMPTION OR ABATEMENT

Total exemption may be claimed on incomes not exceeding £160.
Abatement of £160 is allowed on incomes not exceeding £400 not

entitled to exemption.
Abatement of £100 is allowed on incomes over £400, but not

exceeding £500. Abatement is also allowed of the amount paid in respect of Life

Insurance on life of Taxpayer or his wife (including Accidental Policies for death), to an extent not exceeding one-sixth of the total income. Any reduction however in respect of Insurance premiums has not the effect of giving exemption or abatement when the total income is thereby reduced so as not to exceed the prescribed limits of £160,

£400 and £500 respectively. Income or profits of a married woman living with her husband

are deemed by the Income Tax Acts to be her husband's profits, not withstanding any settlement or the provisions of the Married Woman's Property Act of 1882. But where the wife's income is derived from any profession, employ. ment, vocation or office, exemption or abatement may be claimed by both husband and wife, if the joint incomes do

not exceed £500 (under Schedules D and E). When the total income from all sources does not exceed the

prescribed limits of £160, £400 and £500 respectively, exemption or abatement is given in respect of duties payable (either by deduction as in Schedule C. or otherwise),

under all the five schedules. Partners, Joint Tenants, &c., may claim separate assessment in order to obtain exemption when their share of income is less than the prescribed limit.

EXEMPTION IS ALSO GRANTED

(i.) To Charities, viz:-the income from property held on trust for charitable

purposes, including rents and profits from land and houses under Schedule A, stock or dividends under Schedule C, and yearly interest

and other annual payments under Schedule D. (ii.) To Hospitals, Public Schools, and Almhouses, viz :—The public buildings,

and the income from land and houses belonging to them. (iii.) Friendly Societies and Industrial and Provident Societies, viz. :—The stock,

dividends, and interest belonging to them, under Schedule C; and the

interest, and other profit and gains under Schedule D. (iv.) The Public Buildings and Halls in the Universities, the buildings of

Literary and Scientific Institutions, &c.

REPAYMENT may be obtained when the profits during the year of

assessment turn out to be less than the average for the three years preceding the year of assessment. Notice

must be given promptly. APPEALSAny person aggrieved by an assessment or surcharge is entitled

to appeal, and notice of the place and time of hearing is given on the notice of assessment. Appellants are required to give ten days' notice, and three days before the day of appeal to transmit to the Surveyor of Taxes a complete account of profits for the term prescribed by the Act, giving particulars of all deductions. Assessments may not be altered before the time for hearing, except in cases specially authorised. A Chartered Accountant

should be consulted in all cases of appeal. As Schedule A Assessments are based upon the gross Poor Rate assessments, where it is sought to reduce the former below the latter, the Poor Rate assessment should first be appealed against. As to reducing the Poor Rate, the mode of assessment is not the same in different districts, and it is well to consult a first-rate local Valuer before appealing.

In order to avoid exposure to the general commissioners, who may be competitors in the same line of business, appeals may be made to Special Commissioners, if desired.

VII. BILLS OF EXCHANGE, PROMISSORY NOTES,

CHEQUES, &c.

“ Bills of Exchange were first introduced as a means of paying debts at distant places without the expense and risk of transporting the precious metals. Their use was afterwards greatly extended from another motive."

“ It is usual in every trade to give a certain length of credit for goods bought. A dealer who has sold goods, for which he is to be paid in six months, but who desires to receive payment sooner, draws a bill on his debtor payable in six months and gets the bill discounted by a banker or other money lender, that is, transfers the bill to him, receiving the amount minus interest for the time it has still to run. It has become one of the chief functions of Bills of Exchange to serve as a means by which a debt due from one person can thus be made available for obtaining credit from another" (c).

The acceptance of a bill fixes definitely the amount owing and the date of payment, and gives a more speedy legal remedy than in the case of an ordinary debt.

Bills of Exchange are either Inland or Foreign. An Inland Bill is one which is drawn and payable within the British Islands. Any other bill is a Foreign Bill.

(c) J. S. Mill.

The following are specimens of Bills and Promissory Note :

Inland Bill.
No. 1001.
£250 : 6:5

Huddersfield, January ist, 1885. Four months after date pay to my order the sum of Two hundred and fifty pounds, six shillings and five pence, for value received.

ABRAHAM CROSLAND. To Messrs. Brown, Jones & Co.,

Cheapside,

London. When the bill is accepted, the following words are written across the face of it vertically :--

“Accepted payable
at the London & Westminster Bank.

Brown, Jones & Co."

} of

Foreign Bill.
No. 1002.
£470 : 10 : 0

New York, January 1st, 1885.

first, Forty days after sight of this our second, second and third,

or third, Exchange,

1 first and third, of the same tenor and date unpaid, pay

or first and second) to the order of Messrs. Armitage, Sykes & Co. the sum of Four hundred and seventy pounds and ten shillings sterling, value received, and pass same to account, as advised by

SCARBOROUGH & Co. To Messrs. Eli B. Gough & Co.,

Huddersfield.

On arrival, this bill would be presented to Eli B. Gough & Co. for acceptance; the form of acceptance being similar to that given above. The date should, however, be added in this case, as the forty days date after sight, see Acceptance, page 288.

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£ 520 : 16:0

London, January 1st, 1885. Three months after date, I (d) promise to pay to the order of Messrs. Robinson, Grey & Co. the sum of Five hundred and twenty pounds, sixteen shillings, value received.

WALTER GIBSON. Payable at London and County Bank,

London.

(d) Or “we jointly and severally promise to pay,” if more than one maker.

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