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 NOW IN ITS TWENTY-THIRD EDITION

TAXATION
TAXATION
‘An extremely well written and comprehensive book which is not only an excellent fit with the
current learning outcomes in taxation but is very user friendly and well received by students.’
Dr Justin Hof, University of Dundee
‘A highly comprehensive, well written book, full of helpful examples, and deservedly secure in its
place as the UK’s leading tax textbook.’
Christopher Coles, University of Stirling

FINANCE ACT 2017

Reviews of the previous edition

Now in its 23rd annual edition, Melville’s Taxation continues to be the definitive market-leading text on UK
taxation. Featuring clean, uncluttered prose and a wealth of immensely practical examples, this text is a
comprehensive guide for students taking a first-level course in the subject.
ALAN MELVILLE
This edition brings the book completely up to date with the provisions of the Finance Act 2017, including:

• Making Tax Digital (MTD) • The cash basis threshold

• Revised Budget timetable
• Income tax in Scotland
• Cash basis for property businesses
• Employee shareholder status
• Taxation of termination payments
• Enabler penalties
• Reform of corporate loss relief
• Corporate interest expense restriction
• IHT main residence nil-rate band
• Deemed domicile

This book will be of value to both undergraduate and professional students of business and accounting, TWENTY-
and will be particularly useful for students preparing for the following examinations: THIRD
ICAEW Certificate Level, Principles of Taxation; ACCA Fundamentals Level, Taxation; ACCA Technician
EDITION
Scheme, Foundations in Taxation; CIPFA Diploma Stage, Taxation; AAT Professional Diploma, Personal
Tax and Business Tax; ATT Certificates, Personal Taxation; Business Taxation and Accounting Principles;
AIA Foundation Level, Auditing and Taxation; IFA Level 4, Tax for SMEs.

MELVILLE
FINANCE ACT 2017
ALAN MELVILLE FCA BSc Cert Ed. is a best-selling author. Previously a Senior Lecturer at Nottingham
Trent University, he has many years’ experience of teaching accounting and taxation.

Visit www.pearsoned.co.uk/melville for our suite of resources to accompany this textbook:

• For instructors: a complete solutions guide and PowerPoint slides for each chapter
• For students: a companion website featuring opportunities for extra practice, links to
relevant web pages and additional resources

Front cover image © Getty Images www.pearson-books.com

◆ OVER 250 WORKED EXAMPLES ◆ OVER 250 EXERCISES AND QUESTIONS ◆

CVR_MELVI_23_00804.indd 1 06/07/2017 11:25

 Contents

Basis of assessment 254 Part 3 Corporation Tax

Rates of CGT 255
Relief for capital losses 257 23 Introduction to corporation tax 341
Relief for trading losses 259 Scope of corporation tax 341
Administration of CGT 261 Accounting periods 342
18 Computation of gains and losses 265 Taxable total profits 343
Layout of a CGT computation 265 Trading income 344
Disposal value 266 Income from property 349
Allowable expenditure 266 Income from non-trading loan
Part disposals 268 relationships 349
Assets with negligible value 270 Dividends received 351
Assets held on 31 March 1982 271 Relief for charitable donations 351
Loan relationships 352
19 Chattels and wasting assets 275 Long periods of account 356
The chattels exemption 275 Research and development tax
Chattels disposed of at a loss 277 relief 358
Part disposals of chattels 277 Intangible fixed assets 359
Wasting chattels 280
Wasting assets 281 24 Corporate chargeable gains 363
Leases 283 Chargeable disposals and chargeable
assets 363
20 Shares and securities 292 Basis of assessment 364
The share matching rules 292 Computation of gains and losses 364
The Section 104 holding 294 Indexation allowance 365
Bonus issues 296 Assets held on 31 March 1982 368
Rights issues 298 The rebasing election 371
Capital distributions 300 Assets acquired before 6 April 1965 371
Takeovers 302 Disposals of shares or securities 372
Gilts and qualifying corporate bonds 304 Disincorporation relief 380
21 Principal private residence 308 25 Computation and payment of
Principal private residence 308 the corporation tax liability 385
Partial exemption 309 Corporation tax financial years 385
Deemed residence 310 Rates of corporation tax 386
Letting relief 312 Due date of payment 387
Business use 314 Accounting for income tax deducted
22 CGT reliefs 317 at source 390
Damaged assets 317 Shadow ACT 390
Destroyed assets 320 Self Assessment 391
Replacement of business assets 321 Interest on underpaid and overpaid
Gift of business assets 324 corporation tax 392
Transfer of a business to a limited Penalties 394
company 326 26 Corporation tax losses 398
Entrepreneurs' relief 327 Relief for trading losses (existing
Reinvestment into EIS shares 330 legislation) 398
Loans to traders 331 Carry forward of trade loss relief 399
Review questions (Set B) 334 Unrelieved charitable donations 400

vii
Contents

Trade loss relief against total profits 402 30 Value added tax (2) 471
Repayments of corporation tax 405 Accounting for VAT 471
Anti-avoidance legislation 407 The tax point 472
Choice of loss relief 407 Tax invoices 472
Proposed reforms to carry forward loss Accounting records 473
relief 408 Special schemes 474
Non-trading losses 409 Retail schemes 477
Bad debts 478
27 Close companies and investment
Non-deductible input tax 479
companies 412
Partial exemption 481
Close companies 412
Administration of VAT 483
Definition of a close company 412
Penalties, surcharges and interest 485
Exceptions 415
Consequences of close company status 416 31 Inheritance tax 490
Companies with investment business 419 Chargeable transfers of value 490
Choice of business medium 420 Exempt transfers 492
Incorporation 425 Potentially exempt transfers 494
IHT payable on chargeable lifetime
28 Groups of companies and
transfers 496
reconstructions 428
IHT payable on death 498
Related 51% group companies 428
Valuation 504
51% groups 430
Business property relief 506
Transfer pricing 431
Agricultural property relief 507
75% groups 432
Administration of IHT 507
Group relief 433
Transfer of chargeable assets within 32 Overseas aspects of taxation 511
a group 436 Residence and domicile 511
Capital losses 438 Income tax - general rules 514
Consortia 439 Double taxation relief 515
Proposed restriction on interest relief 441 Income from employment 516
Company reconstructions 441 Trading income 518
Income from property and investments 519
Review questions (Set C) 444
Capital gains tax - general rules 520
Inheritance tax - general rules 521
Part 4 Miscellaneous Corporation tax - general rules 521
Controlled foreign companies 524
29 Value added tax (1) 453 Double taxation relief for companies 525
The principle of VAT 453 Diverted profits tax 529
Taxable persons 454
Taxable supplies 454 Review questions (Set D) 532
Exempt supplies 456
Reduced rate supplies 457 Part 5 Answers
Zero rate supplies 457
The value of a supply 458 Answers to exercises 541
Imports and exports 460 Answers to review questions 593
Registration 463
Index 605
Deregistration 468

viii
 Preface

The main aim of this book is to describe the UK taxation system in sufficient depth and
with sufficient clarity to meet the needs of those undertaking a first course of study in
taxation. The book has not been written with any specific syllabus i n mind but should be
useful to anyone who is studying taxation as part of a university or college course in
accounting, finance or business studies. The book should also be of value to students who
are preparing for the taxation examinations of the profess ional accounting bodies. A list of
relevant examinations is given on the back cover of the book.
Every effort has been made to explain the tax system as clearly as possible. There are
numerous worked examples and each chapter (except Chapter 1) concludes w ith a set of
exercises which thoroughly test the reader's grasp of the new topics introduced in that
chapter. The book also contains four sets of review questions, drawn mainly from the past
examination papers of the professional accounting bodies. The sol utions to most of these
exercises and questions are located at the back of the book but solutions to those exercises
and questions marked with an asterisk (*) are provided in a separate Instructor's Manual.
This twenty-third edition includes the provision s of Finance Act 2017 , which is based
upon Finance (No. 2) Bill 2017. This Bill was fast -tracked through Parliament before the
June 2017 general election a nd omitted many of the proposals made in the March 2017
Budget. The remaining Budget proposals are explained in the relevant chapters of this
book, but it is made abundantly clear that these are merely proposals and have not yet been
enacted. Some of the more significant areas affected are:
• The timetable for the Making Tax Digital (MTD) project (Chapter1)
• A planned reduction in the dividend allowance (Chapter 2)
• The property and trading income allowances (Chapters 5 and 9)
• T he cash basis for property income (Chapter 5)
• Corporation tax loss reliefs (Chapter 26)
• C orporate interest relief restrictions (Chapter 28)
• The deemed domicile rules (Chapter 32).
The Government has stated that there will be a Summer Finance Bill but (at the time of
writing) it is not known which measures will be included in this Bill and whether the
implementation date of any of the m will be delayed. A n analysis of the Summer Finance
Bill will be made available as soon as possible on the website which accompanies this
book. The website address is www.pearsoned.co.uk/melville.
Alan Melville
June 2017

ix
 Acknowledgements

I would like to thank the following accounting bodies for granting me permission to use
their past examination questions:
! Association of Chartered Certified Accountants (ACCA)
! Chartered Institute of Public Finance and Accountancy (CIPFA)
! Association of Accounting Technicians (AAT).
I must emphasise that the answers provided to these questions are entirely my own and are
not the responsibility of the accounting body concerned. I should also point out that the
questions which are printed in this textbook have been amended in some cases so as to
reflect changes in taxation law which have occurred since those questions were originally
published by the accounting body concerned.
I would also like to thank the Office for National Statistics for granting me permission to
reproduce the table of Retail Price Indices given in Chapter 24.
Please note that, unless material is specifically cited with a source, any company names
used within this text have been created by me and are intended to be fictitious.
Alan Melville
June 2017

x
 Summary of Tax Data

Income Tax
2017-18 2016-17
TAX RATES AND BANDS
Basic rate 20% 20%
Higher rate 40% 40%
Additional rate 45% 45%
Basic rate limit £33,500† £32,000
Higher rate limit £150,000 £150,000
Starting rate for savings 0% 0%
Starting rate limit for savings £5,000 £5,000
Personal savings allowance (maximum) £1,000 £1,000
Dividend allowance £5,000‡ £5,000‡
† Basic rate limit applicable to non-savings income of Scottish
taxpayers in 2017-18 is £31,500
‡ Rates of tax on dividends in both years are 7.5%, 32.5% and 38.1%

ALLOWANCES £ £
Personal allowance 11,500 11,000
Marriage allowance 1,150 1,100
Blind person's allowance 2,320 2,290
Married couple's allowance:
Born before 6 April 1935 8,445 8,355
Minimum amount 3,260 3,220
Income limit for basic personal allowance 100,000 100,000
Income limit for married couple's allowance 28,000 27,700
CAR AND FUEL BENEFIT
Not exceeding 50g/km 9% 7%
51g/km to 75g/km 13% 11%
76g/km to 94g/km 17% 15%
95g/km 18% 16%
Each additional 5g/km +1% +1%
Maximum charge 37% 37%
Amount used in car fuel benefit calculation £22,600 £22,200
PENSION SCHEMES £ £
Annual allowance 40,000 40,000
Lifetime allowance 1,000,000 1,000,000

xi
Summary of Tax Data

Capital Allowances
Writing Down Allowance (WDA)
Main pool of plant and machinery 18%
Special rate pool of plant and machinery 8%
Annual Investment Allowance (AIA)
AIA annual limit from 1 January 2016 £200,000
AIA rate 100%
First Year Allowance (FYA) on qualifying plant and machinery
Low emission cars 100%
Gas refuelling equipment† 100%
Energy saving or water efficient technology 100%
Zero-emission goods vehicles 100%
† The Government has proposed that expenditure on charging points for electric
vehicles should also be eligible for a 100% FYA.

National Insurance Contributions

2017-18 2016-17
CLASS 1
Lower earnings limit (weekly) £113 £112
Primary threshold (weekly) £157 £155
Upper earnings limit (weekly) £866 £827
Secondary threshold (weekly) £157 £156
Upper secondary threshold (weekly) £866 £827
Employee contributions
Rate on earnings between primary threshold and UEL 12% 12%
Rate on earnings beyond UEL 2% 2%
Employer contributions
Rate on earnings beyond secondary threshold 13.8% 13.8%
CLASS 1A
Rate 13.8% 13.8%
CLASS 2
Weekly contribution £2.85 £2.80
Small profits threshold £6,025 £5,965
CLASS 3
Weekly contribution £14.25 £14.10
CLASS 4
Lower profits limit £8,164 £ 8,060
Upper profits limit £45,000 £43,000
Rate on profits between lower and upper limit 9% 9%
Rate on profits beyond upper limit 2% 2%

xii
 Summary of Tax Data

Capital Gains Tax

2017-18 2016-17
Standard rate† 10% 10%
Higher rate† 20% 20%
Entrepreneurs' relief rate 10% 10%
Entrepreneurs' relief lifetime limit £10,000,000 £10,000,000
Annual exempt amount £11,300 £11,100
† Taxable gains on the disposal of residential property are taxed at 18% and 28%

Corporation Tax
Financial Year FY2017 FY2016 FY2015 FY2014
Main rate 19% 20% 20% 21%
Small profits rate - - - 20%
Lower limit - - - £300,000
Upper limit - - - £1,500,000
Marginal relief fraction - - - 1/400
Note:
The main rate for FY2018 is 19%.

Inheritance Tax
Date of transfer Nil rate Rate on life- Rate Lower
band time transfers on death rate
6 April 2006 to 5 April 2007 0 - £285,000 20% 40% -
6 April 2007 to 5 April 2008 0 - £300,000 20% 40% -
6 April 2008 to 5 April 2009 0 - £312,000 20% 40% -
6 April 2009 to 5 April 2012 0 - £325,000 20% 40% -
6 April 2012 to 5 April 2018 0 - £325,000 20% 40% 36%
Note:
The main residence nil rate band for 2017-18 is £100,000.

Value Added Tax

Standard rate† 20% (from 4 January 2011)
Reduced rate 5%
Registration threshold £85,000 (from 1 April 2017)
Deregistration threshold £83,000 (from 1 April 2017)
†Standard rate 17.5% prior to 4 January 2011

xiii
Part 1

INCOME TAX AND

NATIONAL INSURANCE
 Chapter 1

Introduction to the UK tax

system

Introduction
The purpose of this first chapter is to provide an overview of the UK tax system. The
principal UK taxes are introduced and classified and the main sources of taxation law are
explained. This chapter also deals with:
(a) the structure and functions of Her Majesty's Revenue and Customs (HMRC) which is
the organisation responsible for the administration of the UK tax system
(b) the annual procedure which is used to determine the tax liability of an ind ividual.
The chapter concludes by distinguishing between tax avoidance and tax evasion.

UK taxes

The UK taxation system is composed of a number of different taxes, some of which are
direct taxes and some of which are indirect taxes:
(a) Direct taxes are charged on income, profits or other gains and are either deducted at
source or paid directly to the tax authorities. The main direct taxes which are payable
by individuals are income tax, capital gains tax and inheritance tax. The main direct
tax payable by companies is corporation tax. All of these taxes are administered by
HM Revenue and Customs (HMRC), which was formed in April 2005 when the
Inland Revenue and HM Customs and Excise were merged. National Insurance
contributions, which can also be looked upo n as a form of direct taxation, are
administered by the NICs and Employer Office of HMRC.
(b) Indirect taxes are taxes on spending. They are charged when a taxpayer buys an item
and are paid to the vendor as part of the purchase price of the item. It is th en the
vendor's duty to pass the tax on to the tax authorities. Indirect taxes include value
added tax (VAT), stamp duty, customs duties and the excise duties levied on alcohol,
tobacco and petrol. The only indirect tax considered in this book is VAT, whic h is
also administered by HM Revenue and Customs.

3
PART 1: Income Tax and National Insurance

Sources of tax law

There is no single source of UK tax law. The basic rules are laid down in Acts of
Parliament but it is left to the courts to interpret these Acts and to provide much of the
detail of the tax system. In addition, HMRC issues a variety of statements, notices and
leaflets which explain how the law is implemented in practice. These statements have no
legal backing but they explain the tax authorities' interpretation of the law and will be
adhered to unless successfully challenged in the courts.

Statute law
The basic rules of the UK tax system are embodied in a number of tax statutes or Acts of
Parliament. The main statutes currently in force for each tax are as follows:
Tax Statute Abbreviation
Income tax Capital Allowances Act 2001 CAA 2001
Income Tax (Earnings and Pensions) Act 2003 ITEPA 2003
Income Tax (Trading and Other Income) Act 2005 ITTOIA 2005
Income Tax Act 2007 ITA 2007
National Insurance Social Security Contributions and Benefits Act 1992 SSCBA 1992
Capital gains tax Taxation of Chargeable Gains Act 1992 TCGA 1992
Inheritance tax Inheritance Tax Act 1984 IHTA 1984
Corporation tax Taxation of Chargeable Gains Act 1992 TCGA 1992
Capital Allowances Act 2001 CAA 2001
Corporation Tax Act 2009 CTA 2009
Corporation Tax Act 2010 CTA 2010
Overseas aspects of tax Taxation (International and Other Provisions) Act 2010 TIOPA 2010
Value added tax Value Added Tax Act 1994 VATA 1994
Administration of } Taxes Management Act 1970 TMA 1970
the tax system } Customs and Excise Management Act 1979 CEMA 1979
These statutes are amended each year by the annual Finance Act, which is based upon the
Budget proposals put forward by the Chancellor of the Exchequer. Some of the tax statutes
provide for the making of detailed regulations by statutory instrument. A statutory
instrument (SI) is a document which is laid before Parliament and then auto matically
becomes law within a stated period unless any objections are raised to it.

European Union law

Membership of the European Union (EU) involves adherence to EU law †. Member states
are not required to adopt a common system of taxation but some parts of the UK system
are nonetheless influenced by EU requirements. At present, the main impact is on VAT,
where the prevailing legislation takes the form of EU Directives. These are binding on the
UK and dictate the results which the internal legislation of the UK must bring about.

4
 CHAPTER 1: Introduction to the UK Tax System

Additionally, EU "State aid" approval must sometimes be sought for amendments to UK

tax-advantaged schemes such as the Enterprise Investment Scheme (see Chapter 6) or the
R&D tax credits scheme (see Chapter 23). Furthermore, decisions made in the European
courts may trigger changes to UK tax law, as occurred in relation to the ta x treatment o f
the losses of overseas subsidiary companies (see Chapter 32).
† In view of the Referendum result on 23 June 2016, it seems safe to say that EU influence over the
UK tax system will eventually cease to exist.

Case law
Over the years, taxpayers and the tax authorities have frequently disagreed over the
interpretation of the tax Acts. As a result, many thousands of tax cases have been brought
before the courts. The decisions made by judges in these cases form an important part of
the tax law of the UK and some of the more significant cases are referred to in this book.

Statements made by the tax authorities

The main statements and other documents produced by HM Revenue and Customs as a
guide to the law on taxation are as follows:
(a) Statements of Practice . A Statement of Practice (SP) sets out the HMRC inter -
pretation of tax legislation and clarifies the way in which the law will be applied in
practice. For example, SP 4/97 (the fourth SP issued in 1997) deals with the taxation
treatment of commissions, cashbacks and discounts.
(b) Extra-Statutory Concessions . An Extra -Statutory Concession (ESC) consists of a
relaxation which gives taxpayers a reduction in liability to which they are not entitled
under the strict letter of the law. In general, concessions are made so as to resolve
anomalies or relieve hardship. For example, ESC A91 deals with the taxation treat-
ment of living accommodation provided by reason of employment .
A process of giving statutory effect to certain ESCs is currently underway. This is
generally being done by means of statutory instruments.
(c) Announcements. Announcements (and other notices and documents ) are issued by
HMRC throughout the year on a wide variety of tax -related subjects. Of especial
interest are the documents which are issued on Budget day and which provide a
detailed explanation of the Budget proposals.
(d) Internal Guidance Manuals . HMRC produces a comprehensive set of internal tax
manuals for the guidance of its own officers. These manuals may be accessed on the
HMRC website (see below).
(e) Explanatory publications. Leaflets, factsheets and booklets are aimed at the general
public and explain the tax system in non -technical language. These can usually be
accessed online, though some are still available in printed form.
Most of the above information is now available on the HMRC website, the address of
which is www.gov.uk/government/organisations/hm-revenue-customs.

5
PART 1: Income Tax and National Insurance

The tax year

The changes to the tax system that are proposed in the annual Budget speech † are usually
intended to take effect as from the start of the next tax year. Tax years for individuals and
for companies are identified as follows:
(a) For individuals, a tax year runs from 6 April to the following 5 Ap ril. For instance,
tax year 2016 -17 began on 6 April 2016 and ended on 5 April 201 7. Tax years are
also referred to as fiscal years or years of assessment.
(b) For companies, a corporation tax financial year runs from 1 April to the following 31
March and is identified by the year in which it begins. For instance, he
t financial year
referred to as FY2016 began on 1 April 2016 and ended on 31 March 2017.
This book takes into account the provisions of Finance Act 2017 (which is based on the
March 2017 ‡ Budget) and describes the UK taxa tion system for fiscal year 2017 -18 and
corporation tax financial year FY2017.
† The Budget traditionally takes place in March but is now being moved back to the Autumn of the
previous year. The final Spring Budget occurred in March 2017. The first Autumn Budget will
occur in Autumn 2017 and will lay out the Government's tax plans for the following tax year.
‡ Many of the proposals made in the March 2017 Budget were removed from the ensuing Finance
Bill so as to expe dite the Bill's progress through Parliament before the general electio n of June
2017. At the time of writing , it seems likely that these proposals will be re -introduced and will
form the basis of a second Finance Act in 2017. Further information will be made available on
the website which accompanies this book. The address is www.pearsoned.co.uk/melville.

Structure of HM Revenue and Customs

Her Majesty's Revenue and Customs (HMRC) consists of a large body of civil servants
headed by the Commissioners for Revenue and Customs . The Commissioners are
appointed by Her Majesty The Queen in accordance with recommendations made by the
Treasury. This Government department has overall responsibility for the public finances
of the UK and is managed by the Chancellor of the Exchequer . The main duties of the
Commissioners for Revenue and Customs are as follows:
(a) to implement the law relating to direct and indirect taxation
(b) to provide advice to the Chancellor of the Exchequer on taxation matters
(c) to administer the divisions and offices into which HMRC is organised.
The routine work of H MRC is carried out by officials known as Officers of Revenue and
Customs. With regard to direct taxation, the main fu nction of these officials is generally to
check a taxpayer's own self -assessment of the tax liability (see below) and then to ensure
that t he correct amount of tax is paid. The functions of HMRC with regard to indirect
taxation (and VAT in particular) are explained later in this book (see Chapter 30).

6
 CHAPTER 1: Introduction to the UK Tax System

HMRC has specialist offices which deal with such matters as pension schemes, charities
and so forth but most of the day-to-day work relating to direct taxation takes place in local
area offices. These offices are responsible for routine assessment and collection and for
ensuring that taxpaye rs comply with tax regulations. At present, HMRC has 170 local
offices but these are to be consolidated into 13 regional centres over the next ten years.
Support for taxpayers who need help with their tax affairs is provided by means of
specialist expert advice either given over the telephone or delivered by mobile advisors at
convenient locations in the community or at a taxpayer's home or workplace.

Administration of the tax system

The remainder of this chapter describes the administration system which is used to assess
an individual's liability to income tax and capital gains tax in each tax year. This system is
known as "Self Assessment". Under this system, the taxpayer ( not HMRC) is primarily
responsible for ensuring that:
(a) the tax liability for each tax year is properly assessed, and
(b) the correct amount of tax is paid on the due date or dates.
Later chapters of this book explain the administration systems which are used for the
purposes of corporation tax, inheritance tax and VAT.

Self Assessment

If an individual's tax liability for a tax year cannot b e collected entirely by deduction at
source (see Chapter 2) or via the PAYE system (see Chapter 7), then the liability must be
formally assessed. The starting point in the assessment process is usually the completion
of a self assessment tax return. The annual procedure is as follows:
(a) Tax returns†‡ are normally issued in April each year to those taxpayers who are likely
to need them. Each tax return includes a formal notice requiring a return to be made
and delivered to HMRC. Paper tax returns are not sent to taxpayers who submitted
the previous year's return electronically (see below) but such taxpayers are still sent a
notice requiring a return to be made and can request a paper tax return if they so wish.
Returns can also be downloaded and printed from the HMRC website.
† As from tax year 2016-17, HMRC is empowered to make an assessment of an individual's income
tax or capital gains tax liability without that person being first required to complete a tax return.
This "simple assessment" procedure may be used where HMRC already has sufficient information
about the individual to make the assessment.
‡ By 2020, the Government intends to replace tax returns with online "digital tax accounts" as part
of the "Making Tax Digital" project (see later in this chapter).

7
PART 1: Income Tax and National Insurance

(b) The main paper tax return consists of a basic eight-page form. There are also several
sets of supplementary pages, each dealing with a different type of income or gains
(e.g. income from self -employment). Taxpayers are required to complete only those
supplementary pages that are relevant to their circumstances.
(c) A short tax return (STR) is available for taxpayers withstraightforward tax affairs.
(d) Rather than completing a paper tax return, taxpayers can file returns electronically by
means of the internet and are encouraged to do so. Approximately 90% of self assess-
ment tax returns are in fact filed electronically.
(e) The information requested in a tax return relates to the tax year just ended. For
example, the tax ret urns issued in April 2017 required taxpayers to declare their
income and gains for tax year 2016-17.
(f) A tax return must be completed in full. It is not permissible to omit figures or to make
entries such as "see accounts" or "as submitted by employer". Unless asked to subm it
accounts or other supporting documentation with the return, a taxpayer is under no
obligation to do so. However, it is necessary to retain all supporting documentation in
case HMRC enquires into the accuracy of a return.
(g) If a main tax return is subm itted on paper, the taxpayer has the option of calculating
his or her own tax liability (using "tax calculation summary" pages) and submitting
this calculation to HMRC as part of the return. HMRC will calculate the tax liability
for taxpayers who do not ta ke up this option or for those who submit the short tax
return (which does not include a self -calculation facility). However, if a paper return
is submitted late (see below), HMRC does not guarantee to advise the taxpayer of the
liability in time for the correct amount of tax to be paid on the correct date.
If a tax return is filed electronically, the tax liability is calculated by computer soft -
ware. In all cases, the resulting assessment is referred to as a "self-assessment".
(h) Self assessment tax retur ns must normally be filed (i.e. submitted to HMRC) on or
before the following dates:
- for paper returns, 31 October following the end of the tax year
- for returns filed electronically, 31 January following the end of the tax year.
However, if the return notice is issued after 31 July following the end of the tax year
(but not after 31 October) the taxpayer has three months from the date of the notice to
submit a paper return. The deadline for electronic filing in such a case remains at 31
January. If the notice is issued after 31 October, the taxpayer has three months from
the date of the notice to submit the return either on paper or electronically.
(i) Penalties are imposed if a return is filed late. Furthermore, the submission of a late
return may mean that the tax liability for the year is not determined until after the due
date of payment (see below). A taxpayer who pays tax late will incur interest and may
also incur a late-payment penalty (see Chapter 15).

8
 CHAPTER 1: Introduction to the UK Tax System

(j) The 31 January which follows the end of a tax year is known as the "filing date" for
that year. For example, t he filing date for tax year 2017 -18 is normally 31 Ja nuary
2019. However, if a return notice is issued after 31 October, the filing date becomes
the date which falls three months after the issue date of the notice.
(k) HMRC is empowered to correct a tax return (so as to rectify obvious errors or
omissions or anything else that is believed to be incorrect) within nine months of the
date on which the return is filed. Similarly, the taxpaye r has the right to amend his or
her tax return within 12 months of the filing date for that return.
(l) A taxpayer who has paid an amount of tax but now believes that this tax should not
have been paid (a situation that could be caused by an error in a tax return) may make
a claim for recovery of the overpaid tax. Such a claim must be made within four years
of the end of the tax year to which it relates. Depending upon the circumstances of
the case, HMRC may or may not accept the claim.
(m) The tax due in relation to a self-assessment is normally payable as follows:
(i) A first payment on account (POA) is due on 31 January in the tax year to which
the self-assessment relates.
(ii) A second POA is due on the following 31 July.
(iii) A final balancing payment is due on the following 31 January.
For example, the tax due in relation to a 2017 -18 self-assessment would normally be
payable on 31 January 201 8 (first POA), 31 July 2018 (second POA) and 31 January
2019 (balancing payment). Further information is given in Chapter 15 of this book.
(n) An employed taxpayer who se balancing payment does not exceed £3,000 may ask
that this should be collected via the PAYE system (see Chapter 7). In such a case ,
taxpayers who file their returns electronically are advised to d o so by 30 December so
as to give HMRC sufficient time to make the necessary arrangements.

Notification of chargeability to tax

An individual who has not received a notice to submit a tax return, but has taxable income
(or gains) of which HMRC is not aware , must notify HMRC of his or her chargeability to
tax within six months of the end of the tax year in which the income arises. However,
notification of chargeability is not required if all of the following conditions are satisfied:
(a) the individual has no capital gains
(b) the individual is not a higher-rate taxpayer (see Chapter 2)
(c) all of the individual's income has been subject to deduction of income tax at source
(see Chapter 2) or has been dealt with via the PAYE system (see Chapter 7)
(d) the individual is not liable to a high income child benefit charge (see Chapter 7).
An individual who fails to notify chargeability within the permitted six-month period will
incur a penalty (see Chapter 15).

9
PART 1: Income Tax and National Insurance

Determinations
If an individual fails to submit a tax return by the required filing date for that return, an
Officer of Revenue and Customs may make a determination of the tax due, calculated
according to "the best of his information and belief". There is no right of appeal against a
determination and the tax due cannot be postponed. A determination can be displaced only
if the individual files the required return.

Enquiries
HMRC may "enquire" into any tax return. The usual reason for opening an enquiry is the
suspicion that something is wrong with the return . However, some enquiry cases may be
selected at random and HMRC is under no obligation to justify the opening of an enquiry
or to state whether or not the case has been chosen randomly. Note that:
(a) If a tax return is filed by the due date, an enquiry c annot usually begin more than 12
months after the date on which the return is filed. This means that the "enquiry
window" for a return which is filed early closes correspondingly early.
(b) If a return is filed late or is amended after the date on which th e return was due to be
filed, the enquiry window is extended until the quarter day which follows the first
anniversary of the date on which the return or amendment was filed. For this purpose,
the quarter days are 31 January, 30 April, 31 July and 31 Octob er.

EXAMPLE
In April 201 7, HMRC issues a notice requiring an individual to submit a tax return for the
year 2016-17. The return is submitted electronically to HMRC on 8 December 2017.
(a) State the date by which any enquiry into the above return must begin .
(b) How would the situation differ if the return was submitted on 1 March 2018?

Solution
(a) The return is filed befo re the due date (31 January 2018 ). Any enquiry must begin
within 12 months of the date that the return si filed (i.e. by 8 December 2018).
(b) The return is filed late. Any enquiry must begin by the quarter day which follows the
first anniversary of the date that the return is filed (i.e. by 30 April 2019).

Discovery assessments
HMRC may raise a "discovery assessment" if it is discovered t hat full disclosure has not
been made in a tax return and tax has been lost as a result.
The time limit for making a discovery assessment is normally four years after the end of
the tax year concerned. This increases to six years if the taxpayer has been n egligent and
20 years if the taxpayer has been dishonest.

10
Another random document with
no related content on Scribd:
revolution as the duty of honest men. The Free-Soilers soon after
renominated Dr. John Gorham Palfrey for a seat in Congress, and in
his campaign Mr. Emerson delivered this speech in several
Middlesex towns. In Cambridge he was interrupted by young men
from the college, Southerners, it was said, but it appears that the
disturbance was quite as much due to “Northern men who were
eager to keep up a show of fidelity to the interest of the South,” as a
Southern student said in a dignified disclaimer. Mr. Cabot in his
Memoir gives an interesting account by Professor James B. Thayer
of Mr. Emerson’s calm ignoring of the rude and hostile
demonstration.
Writing to Carlyle, in the end of July, 1857, Mr. Emerson said: “In
the spring, the abomination of our Fugitive Slave Bill drove me to
some writing and speech-making, without hope of effect, but to clear
my own skirts.”
This was the reaction which could not but be felt by him where he
had been forced to descend into the dust and conflict of the arena
from the serene heights. He wrote in his journal next year:—
“Philip Randolph [a valued friend] was surprised to find me
speaking to the politics of anti-slavery in Philadelphia. I suppose
because he thought me a believer in general laws and that it was a
kind of distrust of my own general teachings to appear in active
sympathy with these temporary heats. He is right so far as it is
becoming in the scholar to insist on central soundness rather than on
superficial applications. I am to give a wise and just ballot, though no
man else in the republic doth. I am to demand the absolute right,
affirm that, and do that; but not push Boston into a showy and
theatrical attitude, endeavoring to persuade her she is more virtuous
than she is. Thereby I am robbing myself more than I am enriching
the public. After twenty, fifty, a hundred years, it will be quite easy to
discriminate who stood for the right, and who for the expedient.”
Yet however hard the duty of the hour might be, Mr. Emerson
never failed in his duty as a good citizen to come to the front in dark
days.
 “In spite of all his gracefulness and reserve and love of the
unbroken tranquillity of serene thought, he was by the right of
heredity a belligerent in the cause of Freedom.”
Page 181, note 1. Shadrach was hurried to Concord after his
rescue, and by curious coincidence Edwin Bigelow, the good village
blacksmith who there harbored him and drove him to the New
Hampshire line, was one of the jurors in the trial of another rescue
case.
Page 183, note 1. Mr. Emerson wrote in his journal, after Mr.
Hoar’s return:—
“The position of Massachusetts seems to me to be better for Mr.
Hoar’s visit to South Carolina in this point, that one illusion is
dispelled. Massachusetts was dishonored before, but she was
credulous in the protection of the Constitution, and either did not
believe, or affected not to believe in that she was dishonored. Now
all doubt on that subject is removed, and every Carolina boy will not
fail to tell every Massachusetts boy whenever they meet how the fact
stands. The Boston merchants would willingly salve the matter over,
but they cannot hereafter receive Southern gentlemen at their tables
without a consciousness of shame.”
Page 192, note 1. Apparently from Vattel, book i., ch. i., p. 79.
Page 201, note 1.

But there was chaff within the flour,

And one was false in ten,
And reckless clerks in lust of power
Forgot the rights of men;
Cruel and blind did file their mind,
And sell the blood of human kind.

Your town is full of gentle names

By patriots once were watchwords made;
Those war-cry names are muffled shames
On recreant sons mislaid.
What slave shall dare a name to wear
Once Freedom’s passport everywhere?

See note to poem “Boston.”

Mr. Charles Francis Adams’s Life of Richard H. Dana gives light

on the phrase used in the first of these verses. The following
passage is from Mr. Dana’s journal during the trial of Anthony Burns,
the fugitive:—
“Choate, I had an amusing interview with. I asked him to make one
effort in favor of freedom, and told him that the 1850 delusion was
dispelled and all men were coming round, the Board of Brokers and
Board of Aldermen were talking treason, and that he must come and
act. He said he should be glad to make an effort on our side, but that
he had given written opinions against us in the Sims case on every
point, and that he could not go against them.

“‘You corrupted your mind in 1850.’

“‘Yes. Filed my mind.’
“‘I wish you would file it in court for our benefit.’”

Shakspeare said,—

“For Banquo’s issue have I filed my mind.”

Page 202, note 1. Mr. F. B. Sanborn, in his Life of Thoreau, says

that Webster gave, as a reason for not visiting Concord in his later
years, that “Many of those whom I so highly esteemed in your
beautiful and quiet village have become a good deal estranged, to
my great grief, by abolitionism, free-soilism, transcendentalism and
other notions which I cannot but regard as so many vagaries of the
imagination.”
Page 204, note 1.

Or who, with accent bolder,

Dare praise the freedom-loving mountaineer?
I found by thee, O rushing Contoocook!
And in thy valleys, Agiochook!
The jackals of the negro-holder.
...
Virtue palters; Right is hence;
Freedom praised, but hid;
Funeral eloquence
Rattles the coffin-lid.

Poems, “Ode,” inscribed to W. H. Channing.

See also what is said of “the treachery of scholars” in the last

pages of “The Man of Letters,” Lectures and Biographical Sketches.
Page 209, note 1. This appeal for a general movement in the free
states to free the slaves and to recompense the planters, unhappily
brought up to the institution, for their loss, was so much better in an
anti-slavery address in New York, in 1855, than in the Concord
speech four years earlier, that I have substituted the later version
here. In Mr. Cabot’s Memoir, pp. 558-593, a portion of the New York
speech, including this paragraph, is given.

THE FUGITIVE SLAVE LAW, NEW YORK, 1854

Writing to his friend Carlyle on March 11, 1854, Mr. Emerson said:
—
“One good word closed your letter in September ... namely, that
you might come westward when Frederic was disposed of. Speed
Frederic, then, for all reasons and for this! America is growing
furiously, town and state; new Kansas, new Nebraska looming up in
these days, vicious politicians seething a wretched destiny for them
already at Washington. The politicians shall be sodden, the States
escape, please God! The fight of slave and freeman drawing nearer,
the question is sharply, whether slavery or whether freedom shall be
abolished. Come and see.”
 Four days before thus writing, he had given this address, to a fairly
large audience, in the “Tabernacle” in New York City, for, however
dark the horizon looked, the very success of the slave power was
working its ruin. Encouraged by the submission of the North to the
passage of the evil law to pacify them, they had resolved to repeal
the Missouri Compromise, which confined slavery to a certain
latitude. It was repealed within a few days of the time Mr. Emerson
made this address. During the debate, Charles Sumner said to
Douglas, “Sir, the bill you are about to pass is at once the worst and
the best on which Congress has ever acted.... It is the worst bill
because it is a present victory for slavery.... Sir, it is the best bill on
which Congress has ever acted, for it annuls all past compromises
with slavery and makes any future compromises impossible. Thus it
puts Freedom and Slavery face to face and bids them grapple. Who
can doubt the result?” The rendition to slavery of Anthony Burns
from Boston in May wrought a great change in public feeling there.
Even the commercial element in the North felt the shame.
Though not a worker in the anti-slavery organization, Mr. Emerson
had always been the outspoken friend of freedom for the negroes.
Witness his tribute in 1837 to Elijah Lovejoy, the martyr in their cause
(see “Heroism,” Essays, First Series, p. 262, and note). But the
narrow and uncharitable speech and demeanor of many
“philanthropists” led him to such reproofs as the one quoted by Dr.
Bartol, “Let them first be anthropic,” or that in “Self-Reliance” to the
angry bigot: “Go love thy infant; love thy wood-chopper; be good-
natured and modest; have that grace; and never varnish your hard,
uncharitable ambition with this incredible tenderness for black folk a
thousand miles off.”
But now the foe was at the very gate. The duty to resist was
instant and commanding. Mr. Emerson wrote in his journal, soon
after:—
“Why do we not say, We are abolitionists of the most absolute
abolition, as every man that is a man must be?... We do not try to
alter your laws in Alabama, nor yours in Japan, or in the Feejee
Islands; but we do not admit them, or permit a trace of them here.
Nor shall we suffer you to carry your Thuggism, north, south, east or
west into a single rod of territory which we control. We intend to set
and keep a cordon sanitaire all around the infected district, and by
no means suffer the pestilence to spread.
“It is impossible to be a gentleman, and not be an abolitionist, for a
gentleman is one who is fulfilled with all nobleness, and imparts it; is
the natural defender and raiser of the weak and oppressed.”
With Mr. Emerson’s indignation at Webster’s fall was mingled
great sorrow. From his youth he had admired and revered him. The
verses about him printed in the Appendix to the Poems show the
change of feeling. He used to quote Browning’s “Lost Leader” as
applying to him, and admired Whittier’s fine poem “Ichabod” (“The
glory is departed,” I. Samuel, iv., 21, 22) on his apostasy.
Mr. Emerson’s faithfulness to his sense of duty, leading him,
against his native instincts, into the turmoil of politics, striving to undo
the mischief that a leader once revered had wrought in the minds of
Americans, is shown in the extract from his journal with regard to this
lecture:—
“At New York Tabernacle, on the 7th March, I saw the great
audience with dismay, and told the bragging secretary that I was
most thankful to those that staid at home; every auditor was a new
affliction, and if all had staid away, by rain or preoccupation, I had
been best pleased.”
Page 217, note 1. In Lectures and Biographical Sketches, in the
essay on Aristocracy, and also in that on The Man of Letters, the
duty of loyalty to his thought and his order is urged as a trait of the
gentleman and the scholar, and in the latter essay, the scholar’s duty
to stand for what is generous and free.
Page 219, note 1. Mr. Emerson in his early youth did come near
slavery for a short time. His diary at St. Augustine, quoted by Mr.
Cabot in his Memoir, mentions that, while he was attending a
meeting of the Bible Society, a slave-auction was going on outside,
but it does not appear that he actually saw it.
Page 221, note 1. Carlyle described Webster as “a magnificent
specimen.... As a Logic-fencer, Advocate, or Parliamentary Hercules,
one would incline to back him at first sight against all the extant
world. The tanned complexion, that amorphous, crag-like face, the
dull black eyes under their precipice of brows, like dull anthracite
furnaces needing only to be blown, the mastiff-mouth, accurately
closed:—I have not traced as much of silent Berserkir-rage, that I
remember of, in any other man.”[D]
Page 225, note 1. Mr. James S. Gibbons (of the New York
Tribune) in a letter written to his son two days after this speech was
delivered, says, referring evidently to this passage:—
“Emerson gave us a fine lecture on Webster. He made him stand
before us in the proportions of a giant; and then with one word
crushed him to powder.”
Page 226, note 1. Professor John H. Wright of Harvard University
has kindly furnished me with the passage from Dio Cassius, xlvii. 49,
where it is said of Brutus:—

Καὶ ἀναβοήσας τοῦτο δὴ Ἡράκλειον

ὦ τλῆμον ἀρετή, λόγος ἄρ’ ἦσθ’, ἐγὼ δέ σε
ὡς ἔργον ἤσκουν· σὺ δ’ ἄρ’ ἐδούλευες τύχῃ,—
παρακάλεσέ τινα τῶν συνόντων, ἵν’ αὐτὸν ἀποκτείνῃ,—

which he renders, “He cried out this sentiment of Heracles, ‘O

wretched Virtue, after all, thou art a name, but I cherished thee as a
fact. Fortune’s slave wast thou;’ and called upon one of those with
him to slay him.”
Professor Wright adds that Theodorus Prodromus, a Byzantine
poet of the twelfth century, said, “What Brutus says (O Virtue, etc.) I
pronounce to be ignoble and unworthy of Brutus’s soul.” It seems
very doubtful whence the Greek verses came.
Page 233, note 1. Just ten years earlier, Hon. Samuel Hoar, the
Commissioner of Massachusetts, sent to Charleston, South
Carolina, in the interests of our colored citizens there constantly
imprisoned and ill used, had been expelled from that state with a
show of force. See Lectures and Biographical Sketches.
 Page 234, note 1. The sending back of Onesimus by Paul was a
precedent precious in the eyes of pro-slavery preachers, North and
South, in those days, ignoring, however, Paul’s message, “Not now
as a servant, but above a servant, a brother beloved, specially to
me, but how much more unto thee, both in the flesh and in the Lord.
If thou count me therefore a partner, receive him as myself.”[E]
Page 235, note 1. The hydrostatic paradox has been before
alluded to as one of Mr. Emerson’s favorite symbols, the balancing of
the ocean by a few drops of water. In many places he dwells on the
power of minorities—a minority of one. In “Character” (Lectures and
Biographical Sketches) he says, “There was a time when Christianity
existed in one child.” For the value and duty of minorities, see
Conduct of Life, pp. 249 ff., Letters and Social Aims, pp. 219, 220.
Page 236, note 1. This was a saying of Mahomet. What follows,
with regard to the divine sentiments always soliciting us, is thus
rendered in “My Garden:”

Ever the words of the gods resound;

But the porches of man’s ear
Seldom in this low life’s round
Are unsealed, that he may hear.

Page 236, note 2. This is the important key to the essay on Self-
Reliance.
Page 238, note 1. In the “Sovereignty of Ethics” Mr. Emerson
quotes an Oriental poet describing the Golden Age as saying that
God had made justice so dear to the heart of Nature that, if any
injustice lurked anywhere under the sky, the blue vault would shrivel
to a snake-skin, and cast it out by spasms.
Page 240, note 1. There seems to be some break in the
construction here probably due to the imperfect adjustment of
lecture-sheets. It would seem that the passage should read: “Liberty
is never cheap. It is made difficult because freedom is the
accomplishment and perfectness of man—the finished man; earning
and bestowing good;” etc.
 Page 241, note 1. See Lectures and Biographical Sketches, pp.
246 and 251.
Page 242, note 1. The occasion alluded to was Hon. Robert C.
Winthrop’s speech to the alumni of Harvard College on
Commencement Day in 1852. What follows is not an abstract, but
Mr. Emerson’s rendering of the spirit of his address.

THE ASSAULT UPON MR. SUMNER

One evening in May, Judge Hoar came to Mr. Emerson’s house,
evidently deeply stirred, and told in a few words the startling news
that the great Senator from Massachusetts had been struck down at
his desk by a Representative from South Carolina, and was
dangerously hurt. The news was heard with indignant grief in
Concord, and a public meeting was held four days later in which Mr.
Emerson and others gave vent to this feeling.
Among Mr. Emerson’s papers are the fragmentary notes on
Sumner, given below, without indication as to when they were used.

CHARLES SUMNER
Clean, self-poised, great-hearted man, noble in person,
incorruptible in life, the friend of the poor, the champion of the
oppressed.
Of course Congress must draw from every part of the
country swarms of individuals eager only for private interests,
who could not love his stern justice. But if they gave him no
high employment, he made low work high by the dignity of
honesty and truth. But men cannot long do without faculty and
perseverance, and he rose, step by step, to the mastery of all
affairs intrusted to him, and by those lights and upliftings with
which the spirit that makes the Universe rewards labor and
brave truth. He became learned, and adequate to the highest
questions, and the counsellor of every correction of old errors,
and of every noble reform. How nobly he bore himself in
disastrous times. Every reform he led or assisted. In the
shock of the war his patriotism never failed. A man of varied
learning and accomplishments.
He held that every man is to be judged by the horizon of his
mind, and Fame he defined as the shadow of excellence, but
that which follows him, not which he follows after.
Tragic character, like Algernon Sydney, man of conscience
and courage, but without humor. Fear did not exist for him. In
his mind the American idea is no crab, but a man incessantly
advancing, as the shadow of the dial or the heavenly body
that casts it. The American idea is emancipation, to abolish
kingcraft, feudalism, black-letter monopoly, it pulls down the
gallows, explodes priestcraft, opens the doors of the sea to all
emigrants, extemporizes government in new country.
Sumner has been collecting his works. They will be the
history of the Republic for the last twenty-five years, as told by
a brave, perfectly honest and well instructed man, with social
culture and relation to all eminent persons. Diligent and able
workman, with rare ability, without genius, without humor, but
with persevering study, wide reading, excellent memory, high
stand of honor (and pure devotion to his country), disdaining
any bribe, any compliances, and incapable of falsehood. His
singular advantages of person, of manners, and a
statesman’s conversation impress every one favorably. He
has the foible of most public men, the egotism which seems
almost unavoidable at Washington. I sat in his room once at
Washington whilst he wrote a weary procession of letters,—
he writing without pause as fast as if he were copying. He
outshines all his mates in historical conversation, and is so
public in his regards that he cannot be relied on to push an
office-seeker, so that he is no favorite with politicians. But
wherever I have met with a dear lover of the country and its
moral interests, he is sure to be a supporter of Sumner.
 It characterizes a man for me that he hates Charles
Sumner: for it shows that he cannot discriminate between a
foible and a vice. Sumner’s moral instinct and character are
so exceptionally pure that he must have perpetual magnetism
for honest men; his ability and working energy such, that
every good friend of the Republic must stand by him. Those
who come near him and are offended by his egotism, or his
foible (if you please) of using classic quotations, or other bad
tastes, easily forgive these whims, if themselves are good, or
magnify them into disgust, if they themselves are incapable of
his virtue.
And when he read one night in Concord a lecture on
Lafayette we felt that of all Americans he was best entitled by
his own character and fortunes to read that eulogy.
Every Pericles must have his Cleon: Sumner had his
adversaries, his wasps and back-biters. We almost wished
that he had not stooped to answer them. But he
condescended to give them truth and patriotism, without
asking whether they could appreciate the instruction or not.
A man of such truth that he can be truly described: he
needs no exaggerated praise. Not a man of extraordinary
genius, but a man of great heart, of a perpetual youth, with
the highest sense of honor, incapable of any fraud, little or
large; loving his friend and loving his country, with perfect
steadiness to his purpose, shunning no labor that his aim
required, and his works justified him by their scope and
thoroughness.
He had good masters, who quickly found that they had a
good scholar. He read law with Judge Story, who was at the
head of the Law School at Harvard University, and who
speedily discovered the value of his pupil, and called him to
his assistance in the Law School. He had a great talent for
labor, and spared no time and no research to make himself
master of his subject. His treatment of every question was
 faithful and exhaustive, and marked always by the noble
sentiment.

Page 252, note 1. With this message of comfort to Sumner, struck

down for his defence of Liberty, may be contrasted what is said of
Webster when he abandoned her cause:—
“Those to whom his name was once dear and honored, as the
manly statesman to whom the choicest gifts of Nature had been
accorded, disown him: ... he who was their pride in the woods and
mountains of New England is now their mortification,—they have
torn his picture from the wall, they have thrust his speeches into the
chimney,” etc.—“Address on the Fugitive Slave Law,” at Concord,
1851.

SPEECH ON AFFAIRS IN KANSAS

By an act of Congress, passed in May, 1854, the territories of
Kansas and Nebraska were organized, and in a section of that act it
was declared that the Constitution and all the laws of the United
States should be in force in these territories, except the Missouri
Compromise Act of 1820, which was declared inoperative and void.
The act thereby repealed had confined slavery to the region of the
Louisiana Purchase south of latitude 36°, 30´ North. Foreseeing the
probable success of this measure to increase the area of slavery,
Emigrant Aid Societies had been formed in Massachusetts first, and
later, in Connecticut, which assisted Northern emigrants to the
settlement of this fertile region. Settlers from the Northwestern
States also poured in, and also from Missouri, the latter bringing
slaves with them. A fierce struggle, lasting for some years and
attended with bloodshed and barbarities, began at once, hordes of
armed men from the border state of Missouri constantly voting at
Kansas elections and intimidating the free state settlers, and even
driving parties of immigrants out of the state. Franklin Pierce was
then President, and threw the influence and power of the
administration on the side of the pro-slavery party in Kansas.
Despairing of redress from Washington, the settlers from the free
states appealed in their distress to their friends at home, and sent
Mr. Whitman, Rev. Mr. Nute, and later, John Brown, to make known
to them their wrongs, and ask moral and material aid, especially
arms to defend their rights, and reinforcements of brave settlers.
Meetings were held, not only in the cities, but in the country towns,
and, certainly in the latter, were well attended by earnest people who
gave, a few from their wealth, but many from their poverty, large
sums to help “bleeding Kansas.” In response to the petitions of the
friends of Freedom, who urged the Legislature of Massachusetts to
come to the rescue, a joint committee was appointed by the General
Court to consider the petitions for a state appropriation of ten
thousand dollars to protect the interests of the North and the rights of
her citizens in Kansas, should they be again invaded by Southern
marauders. John Brown addressed this committee in February,
1856. He made a clear and startling statement of the outrages he
had witnessed and the brave struggles of the settlers, and told of the
murder and imprisonment and maltreatment of his sons, seven of
whom were in Kansas with him during the struggle.[F]
Mr. Emerson always attended the meetings in aid of Kansas in
Concord, gave liberally to the cause, and spoke there and elsewhere
when called upon.
Page 263, note 1. George Bancroft, the historian, said of the
conclusion of this speech:—
“Emerson as clearly as any one, perhaps more clearly than any
one at the time, saw the enormous dangers that were gathering over
the Constitution.... It would certainly be difficult, perhaps impossible,
to find any speech made in the same year that is marked with so
much courage and foresight as this of Emerson.... Even after the
inauguration of Lincoln several months passed away before his
Secretary of State or he himself saw the future so clearly as
Emerson had foreshadowed it in 1856.”[G]

JOHN BROWN: SPEECH AT BOSTON

 Mr. F. B. Sanborn, in his Familiar Letters of Thoreau, says that he
introduced John Brown to Thoreau in March, 1857, and Thoreau
introduced him to Emerson. This was at the time when Brown came
on to awaken the people of Massachusetts to the outrages which the
settlers and their families were suffering, and procure aid for them.
His clear-cut face, smooth-shaven and bronzed, his firmly shut
mouth and mild but steady blue eyes, gave him the appearance of
the best type of old New England farmers; indeed he might well have
passed for a rustic brother of Squire Hoar. Mr. Emerson was at once
interested in him and the story of the gallant fight that the Free-State
men in Kansas were making, though Brown was very modest about
his own part and leadership. Indeed he claimed only to be a fellow
worker and adviser. I think that soon after this time, on one of his
visits to Concord, he stayed at Mr. Emerson’s house; certainly he
spent the evening there. The last time he came to Concord he was a
changed man; all the pleasant look was gone. His gray hair, longer
and brushed upright, his great gray beard and the sharpening of his
features by exposure and rude experiences gave him a wild, fierce
expression. His speech in the Town Hall was excited, and when he
drew a huge sheath-knife from under his coat and showed it as a
symbol of Missouri civilization, and last drew from his bosom a
horse-chain and clanked it in air, telling that his son had been bound
with this and led bareheaded under a burning sun beside their
horses, by United States dragoons, and in the mania brought on by
this inhuman treatment had worn the rusty chain bright,—the old
man recalled the fierce Balfour of Burley in Scott’s Old Mortality. It
was a startling sight and sent a thrill through his hearers. Yet on
earlier occasions his speech had been really more effective, when a
quiet farmer of mature years, evidently self-contained, intelligent,
truthful and humane, simply told in New England towns what was
going on in Kansas, the outrages committed upon the settlers, the
violation of their elementary rights under the Constitution,—and all
this connived at by the general government. He opened the eyes of
his hearers, even against their wills, to the alarming pass into which
the slave power had brought the affairs of the country.
But now wrong and outrage, not only on others but terribly
suffered in his own family, had made Brown feel that not he but
“Slavery was an outlaw” against which he “held a commission direct
from God Almighty” to act. A friend quoted him as having said, “The
loss of my family and the troubles in Kansas have shattered my
constitution, and I am nothing to the world but to defend the right,
and that, by God’s help, I have done and will do.”
The people were not ready to follow him in revolutionary
measures, but when on his own responsibility he had precipitated
the inevitable conflict by breaking with a government, then so
unrighteous, and offered his life as a sacrifice for humanity, they
could not but do homage to him as a hero, who was technically a
traitor. He had cut the Gordian knot which they had suffered to be
tied tighter.
Of course Mr. Emerson had known nothing of John Brown’s plan
for a raid into the slave states. It was the motive and courage he
honored, not the means. He wrote: “I wish we should have health
enough to know virtue when we see it, and not cry with the fools and
the newspapers, ‘Madman!’ when a hero passes.”
On the first day of November, John Brown had been sentenced to
death. This meeting in Boston, to give aid to his family, was held on
the eighteenth, just two weeks before his execution.
The verses which serve as motto are from Mr. Edmund Clarence
Stedman’s poem written at the time, which Mr. Emerson used to
read aloud to his family and friends with much pleasure.
Page 269, note 1. “This court acknowledges, I suppose, the
validity of the Law of God. I see a book kissed here which I suppose
to be the Bible, or, at least, the New Testament. That teaches me
that all things ‘whatsoever I would that men should do unto me, I
should do even so to them.’ It teaches me further to ‘remember them
which are in bonds as bound with them.’ I endeavored to act up to
that instruction. I say I am yet too young to understand that God is
any respecter of persons. I believe that to have interfered as I have
done, as I have always freely admitted that I have done, in behalf of
His despised poor, was not wrong, but right. Now, if it is deemed
necessary that I should forfeit my life for the furtherance of the ends
of justice, and mingle my blood further with the blood of my children,
and with the blood of millions in this slave country whose rights are
disregarded by wicked, cruel and unjust enactments—I submit: so let
it be done.” From the Speech of John Brown to the Court.
Page 270, note 1. Among the sheets of the lecture “Courage” is
one which seems to have been used at that time:—
“Governor Wise and Mr. Mason no doubt have some right to their
places. It is some superiority of working brain that put them there,
and the aristocrats in every society. But when they come to deal with
Brown, they find that he speaks their own speech,—has whatever
courage and directness they have, and a great deal more of the
same; so that they feel themselves timorous little fellows in his hand;
he outsees, outthinks, outacts them, and they are forced to shuffle
and stammer in their turn.
“They painfully feel this, that he is their governor and superior, and
the only alternative is to kneel to him if they are truly noble, or else (if
they wish to keep their places), to put this fact which they know, out
of sight of other people, as fast as they can. Quick, drums and
trumpets strike up! Quick, judges and juries, silence him, by
sentence and execution of sentence, and hide in the ground this
alarming fact. For, if everything comes to its right place, he goes up,
and we down.”
Page 271, note 1. Commodore Hiram Paulding, in 1857, had
broken up Walker’s filibustering expedition at Nicaragua. The arrest
of Walker on foreign soil the government did not think it wise wholly
to approve.
Page 272, note 1. The allusion is to the trials of the fugitives
Shadrach, Sims and Burns in Boston. The story of these humiliations
is told in full and in a most interesting manner in the diary of Richard
H. Dana,[H] whose zeal in the cause of these poor men did him great
honor.
During the trial of Sims, a chain was put up, as a barrier against
the crowd, around the United States Court-House, and the stooping
of the judges to creep under this chain in order to enter the court-
house was considered symbolic of their abject attitude towards the
aggressive slave power.

JOHN BROWN: SPEECH AT SALEM

The second of December, on which day John Brown was executed
at Charlestown, Virginia, was bright in that State, but in New England
was of a strange sultriness with a wind from the south and a lowering
sky. At noon, the hour appointed for his death, in Concord (as in
many New England towns) the men and women who honored his
character and motives gathered and made solemn observance of a
day and event which seemed laden with omens. There was a prayer,
I think offered by the Rev. Edmund Sears of Wayland,[I] Mr. Emerson
read William Allingham’s beautiful poem “The Touchstone” which is
used as the motto to this speech, Thoreau read with sad bitterness
Sir Walter Raleigh’s “The Soule’s Errand.” Hon. John S. Keyes read
some appropriate verses from Aytoun’s “Execution of Montrose” and
Mr. Sanborn a poem which he had written for the occasion.
Page 279, note 1. Here, as often in Mr. Emerson’s speech and
writing, is shown his respect for the old religion of New England and
its effect on the thought and character of her people. As Lowell said
of them in his Concord Ode in 1875:—

“And yet the enduring half they chose,

Whose choice decides a man life’s slave or king,
The invisible things of God before the seen and known.”

Page 279, note 2. I well remember the evening, in my school-boy

days, when John Brown, in my father’s house, told of his
experiences as a sheep-farmer, and his eye for animals and power
over them. He said he knew at once a strange sheep in his flock of
many hundred, and that he could always make a dog or cat so
uncomfortable as to wish to leave the room, simply by fixing his eyes
on it.
 Page 281, note 1. “Heroism feels and never reasons, and
therefore is always right; and although a different breeding, different
religion and greater intellectual activity would have modified or even
reversed the particular action, yet, for the hero, that thing he does is
the highest deed, and is not open to the censure of philosophers and
divines.”—“Heroism,” Essays, First Series.
“I can leave to God the time and means of my death, for I believe
now that the sealing of my testimony before God and man with my
blood will do far more to further the cause to which I have earnestly
devoted myself than anything else I have done in my life.”—Letter of
John Brown to a friend.

THEODORE PARKER
Theodore Parker, worn by his great work in defence of liberal
religion and in every cause of suffering humanity, had succumbed to
disease and died in Florence in May, 1860, not quite fifty years of
age. Born in the neighbor town of Lexington when Emerson was
seven years old, they had been friends probably from the time when
the latter, soon after settling in Concord, preached for the society at
East Lexington, from 1836 for two years. Parker was, during this
period, studying divinity, and was settled as pastor of the West
Roxbury church in 1837. In that year he is mentioned by Mr. Alcott as
a member of the Transcendental Club and attending its meetings in
Boston. When, in June, 1838, Mr. Emerson fluttered the conservative
and the timid by his Divinity School Address, the young Parker went
home and wrote, “It was the most inspiring strain I ever listened to....
My soul is roused, and this week I shall write the long-meditated
sermons on the state of the church and the duties of these times.”
Mr. Parker was one of those who attended the gathering in Boston
which gave birth to the Dial, to which he was a strong contributor.
Three years after its death, he, with the help of Mr. James Elliot
Cabot and Mr. Emerson, founded the Massachusetts Quarterly
Review, vigorous though short-lived, of which he was the editor.
Parker frequently visited Emerson, and the two, unlike in their
method, worked best apart in the same great causes. Rev. William
Gannett says, “What Emerson uttered without plot or plan, Theodore
Parker elaborated to a system. Parker was the Paul of
transcendentalism.”
Mr. Edwin D. Mead, in his chapter on Emerson and Theodore
Parker,[J] gives the following pleasant anecdote:—
“At one of Emerson’s lectures in Boston, when the storm against
Parker was fiercest, a lecture at which a score of the religious and
literary leaders of the city were present, Emerson, as he laid his
manuscript upon the desk and looked over the audience, after his
wont, observed Parker; and immediately he stepped from the
platform to the seat near the front where Parker sat, grasping his
hand and standing for a moment’s conversation with him. It was not
ostentation, and it was not patronage: it was admiring friendship,—
and that fortification and stimulus Parker in those times never failed
to feel. It was Emerson who fed his lamp, he said; and Emerson said
that, be the lamp fed as it might, it was Parker whom the time to
come would have to thank for finding the light burning.”
Parker dedicated to Emerson his Ten Sermons on Religion. In
acknowledging this tribute, Mr. Emerson thus paid tribute to Parker’s
brave service:—
“We shall all thank the right soldier whom God gave strength to
fight for him the battle of the day.”
When Mr. Parker’s failing forces made it necessary for him to drop
his arduous work and go abroad for rest, Mr. Emerson was
frequently called to take his place in the Music Hall on Sundays. I
think that this was the only pulpit he went into to conduct Sunday
services after 1838.
It is told that Parker, sitting, on Sunday morning, on the deck of the
vessel that was bearing him away, never to return, smiled and said:
“Emerson is preaching at Music Hall to-day.”
Page 286, note 1. Mr. Emerson wrote in his journal:—
 “The Duc de Brancas said, ‘Why need I read the Encyclopédie?
Rivarol visits me.’ I may well say it of Theodore Parker.”
Page 290, note 1. Richard H. Dana wrote in his diary, November
3, 1853:—
“It is now ten days since Webster’s death.... Strange that the best
commendation that has appeared yet, the most touching, elevated,
meaning eulogy, with all its censure, should have come from
Theodore Parker! Were I Daniel Webster, I would not have that
sermon destroyed for all that had been said in my favor as yet.”
Page 293, note 1. I copy from Mr. Emerson’s journal at the time of
Mr. Parker’s death these sentences which precede some of those
included in this address:—
“Theodore Parker has filled up all his years and days and hours. A
son of the energy of New England; restless, eager, manly, brave,
early old, contumacious, clever. I can well praise him at a spectator’s
distance, for our minds and methods were unlike,—few people more
unlike. All the virtues are solitaires. Each man is related to persons
who are not related to each other, and I saw with pleasure that men
whom I could not approach, were drawn through him to the
admiration of that which I admire.”

AMERICAN CIVILIZATION
On January 31, 1862, Mr. Emerson lectured at the Smithsonian
Institution in Washington on American Civilization. Just after the
outbreak of war in the April preceding, he had given a lecture, in a
course in Boston on Life and Literature, which he called “Civilization
at a Pinch,” the title suggesting how it had been modified by the
crisis which had suddenly come to pass. In the course of the year
the flocking of slaves to the Union camps, and the opening vista of a
long and bitter struggle, with slavery now acknowledged as its root,
had brought the question of Emancipation as a war-measure to the
front. Of course Mr. Emerson saw hope in this situation of affairs,
and when he went to Washington with the chance of being heard by