GOODWIN Vs. BREWSTER (H M INSPECTOR OF TAXES)

JUDGEMENT

(1.) The provisions of the Income Tax Act under which Mr. Goodwin was assessed under Schedule E are these : "Tax under Schedule E shall be charged in respect of every public office or employment of profit..." and so on "......for every public office or employment of profit.." and so on ".. for every twenty shilling of the annual amount thereof" Then Rule I of the Rules applicable to Schedule E says, "Tax under this Schedule shall be annually charged on every person having or exercising an office or employment of profit mentioned in this Schedule.." Rule 6 says, "the tax shall be paid in respect of all the public offices and employments of profit within the United Kingdom or by the officers hereinafter respectively described", and then (h) in the list which follows says, "offices or employments of profit under any company or society, whether corporate or not corporate."

(2.) On July 16, 1936, Mr. Goodwin was appointed to be a director of that company, and on the same day in pursuance of authority conferred by the company in general meeting and under the powers contained in the articles of the company the board of directors appointed him to be the managing director of the company and entered into an agreement on the same date for his employment for a period of seven years as managing director of director of the company at a salary of pound 3,000 per annum. As a director of the company he would be entitled under the articles to the sum of pound 200 a year and additional remuneration if any was voted by the company in general meeting.

(3.) The questions which have been raised are these : The Special Commissioners found that he only held one office, that the office was a public office under the company and that accordingly on the principles of a case in the House of Lords called McMillan v. Guest, Mr. Goodwin was assessable in respect of the salary which he received as managing director and in respect of the directors fees which he received as an ordinary director of the company, because under the decision in that case a director of a British company, even though he absented himself abroad, is the holder of a public office within the United Kingdom within the meaning of Schedule E and accordingly is taxable under that schedule.