PZ 6064/32 'Mr C C Garbett: liability to British Income Tax during period of employment under Iraq administration' [‎89r] (71/88)

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in the Colonial Office, as the Department from which the issue
of pay was made, appears to be legally correct, but if the
pay was in fact issued from Iraq funds and subsequently
reimbursed from the British Treasury, I think a case could
be made out for holding that the charge to income-tax is not
in accordance with the rules applicable to Schedule E in the
Income-Tax Act, 1918, and Mr* Garbett could, in that event,
appeal to the Special Commissioners against the assessment,
and could test the vaL idity of the proposed charge.
As regards recovery of the tax, which amounts to
some no action can be taken by the Inland Revenue
authorities unless and until Mr* Garbett returns to this
country, so that his position as regards payment of the sum
claimed is a strong one, and as he is not convinced of the
justice of the claim, it is open to him to withhold payment
until he returns to the United Kingdom.
I understand that the Colonial Office are inclined
to think that the charge is inequitable, and might be
prepared to approach the Treasury again, with a view to
its being waived; but it may perhaps suffice at the present
stage if we were to communicate to the Colonial Office the
substance of this note, in case they may feel inclined to
make any use of it in a further discussion with the
Treasury and Inland Revenue authorities. It seems
unnecessary, pending further action by the Colonial Office,
to trouble the Secretary of State with the matter, in spite
of Mr. Garbett’s request.
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