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

Taxation
Companion Website ON THE
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Taxation
Finance Act 2017
Twenty-third edition

Alan Melville
FCA, BSc, Cert. Ed.

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong
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PEARSON EDUCATION LIMITED
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First published 1995 (print)

Twenty-third edition published 2018 (print and electronic)
© Pearson Professional Limited 1995, 1996 (print)
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A catalogue record for the print edition is available from the British Library
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A catalog record for the print edition is available from the Library of Congress
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Front cover image: © Getty Images
Print edition printed and bound by Ashford Colour Press Ltd, Gosport

NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION
Contents

Preface ix Eligible interest payments 52

Acknowledgements x Annual payments 53
Summary of tax data xi Gifts of shares or property to charity 53
Payments which are tax reducers 54
Part 1 Income Tax and National Insurance Maintenance payments 54
Loans used to purchase a life annuity 55
1 Introduction to the UK tax system 3 Gifts of pre-eminent property to
UK taxes 3 the nation 55
Sources of tax law 4 Gift Aid 56
The tax year 6 5 Income from property 60
Structure of HM Revenue and Customs 6 Definition of property income 60
Administration of the tax system 7 Basis of assessment and allowable
Self Assessment 7 expenditure 61
Appeals 11 Capital expenditure 62
Tax evasion 12 Losses 64
Tax avoidance 12 Lease premiums 65
Making Tax Digital 14 "Rent-a-room" relief 67
The HMRC Charter 14 Furnished holiday lettings 67
2 Introduction to income tax 16 6 Income from savings and investments 72
Taxable persons 16 Interest received 72
Classification of income 17 Dividends received 74
Exempt income 18 Tax-efficient investments 74
Structure of an income tax computation 19 Individual Savings Accounts 75
Married couples and civil partners 20 Enterprise Investment Scheme 77
Rates of income tax for 2017-18 20 Venture Capital Trusts 78
Income taxed at source 22 Child Trust Funds 79
Savings income 23 Income from trusts and settlements 80
Dividend income 30 Miscellaneous income 83
3 Personal allowances 36 7 Income from employment (1) 86
Personal allowances for 2017-18 36 Employment and self-employment 86
The personal allowance 37 Basis of assessment 89
Blind person's allowance 40 Employment income 89
Tax reducers 40 Non-taxable employment income 90
Married couple's allowance 40 Deductible expenses 92
4 Payments and gifts eligible Payments made on termination of
for tax relief 47 employment 95
Payments and gifts deductible from The PAYE system 97
total income 47 Construction industry scheme 101

v
Contents

Employee incentive schemes 102 Early trade losses relief 183

Terminal trade loss relief 185
8 Income from employment (2) 107
Post-cessation trade relief 187
Benefits in kind 107
Transfer of a business to a company 187
Living accommodation 109
Losses on shares in unlisted trading
Cars provided for private use 112
companies 187
Beneficial loans 116
Limit on income tax reliefs 188
Salary sacrifice 118
13 Income from self-employment:
9 Income from self-employment:
Partnerships 191
Computation of income 120
Principles of partnership taxation 191
The badges of trade 120
Notional profits and losses 194
The calculation of trading profits 122
Change in partnership composition 195
Deductibility of expenditure 123
Non-trading income 197
Disallowed expenditure 123
Trading losses 198
Allowable expenditure 126
Adjustments relating to income 128 14 Pension contributions 203
Trading income allowance 129 Registered pension schemes 203
Cash basis and simplified Tax relief for contributions
expenses 130 by scheme members 205
Tax relief for contributions
10 Income from self-employment:
by employers 208
Basis periods 136
Annual allowance charge 210
The current year basis 136
Lifetime allowance charge 213
Commencement of trade 137
Cessation of trade 140 15 Payment of income tax, interest
Change of accounting date 142 and penalties 218
Averaging of trading profits for Payment of income tax 218
farmers and creative artists 147 Late payment penalties 221
Interest on overdue income tax 222
11 Income from self-employment:
Interest on overpaid income tax 223
Capital allowances 153
Penalties 223
Eligible expenditure 153
Chargeable periods 153 16 National Insurance contributions 227
Plant and machinery 154 Class 1 227
Capital allowances on plant and Class 1A 233
machinery 156 Class 1B 233
Writing down allowance 157 Class 2 234
Annual investment allowance 160 Class 3 234
First year allowance 163 Class 4 235
Balancing allowances and charges 165 Annual maximum contributions 236
Non-pooled assets 165
Review questions (Set A) 240
Allowances on cessation of trade 170
Miscellaneous capital allowances 171
Part 2 Capital Gains Tax
12 Income from self-employment:
Trading losses 177 17 Introduction to capital gains tax 251
Relief for trading losses 177 Chargeable persons 251
Carry-forward trade loss relief 178 Chargeable assets 252
Trade loss relief against total income 180 Chargeable disposals 253

vi
 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
 CHAPTER 1: Introduction to the UK Tax System

Record keeping
Taxpayers are required to keep proper records so that they can make a correct tax return
and (if necessary) substantiate the figures entered on the return. A taxpayer who is in
business or who lets property must normally preserve these records for five years after the
31 January which follows the end of the tax year concerned. Otherwise, records must be
preserved for 12 months after the 31 January which follows the end of the tax year . For
example, records for tax year 2017-18 must normally be retained until 31 January 2024 by
a taxpayer who is in business or who lets property and until 31 January 2020 otherwise.

Appeals

Taxpayers have the right of appeal in relation to a number of HMR C decisions. For
example, a taxpayer may appeal against a discovery assessment or against an HMRC
amendment to a self-assessment. The main features of the appeals system are as follows:
(a) An appeal must be sent to HMRC in writing within 30 days of the disputed decision.
(b) The taxpayer may also apply to postpone payment of all or part of any tax which is
payable as a result of the decision, though interest will continue to accrue on the
postponed amount until the appeal is settled. However, postponement is generally not
available if the appeal relates to the use of a tax avoidance scheme covered by the
DOTAS rules (see below) or in connection with arrangements which have been
counteracted by HMRC under the GAAR (see below).
(c) On receiving an appeal, HMR C considers the taxpayer's reasons for disputing the
decision. Most appeals are settled by discussion and agreement at this stage.
(d) If the taxpayer and HMRC are unable to agree, the taxpayer will be offered an
internal review of the decision. A taxpayer who wishes to accept this offer must
normally do so within 30 days. An internal review is carried out by an HMRC officer
who has not previously been involved with the disputed decision and is usually
completed within 45 days. The review officer then write s to the taxpayer to inform
him or her of the review's conclusions.
(e) A taxpayer who rejects the offer of an internal review may appeal to a tribunal within
30 days of the date of the offer letter. Otherwise, an appeal to a tribunal may be made
within 30 days of the date of the review conclusion letter.
(f) Most appeals are dealt with by the Tax Chamber of the First -tier Tribunal. However,
more complex appeals may be heard by the Tax and Chancery Chamber of the Upper
Tribunal. The Upper Tribunal also hears appeals against First-tier Tribunal decisions.
(g) If either HMRC or the person concerned is dissatisfied with a decision made by the
Upper Tribunal, a dispute on a point of law may be referred to the Court of Appeal.

11
PART 1: Income Tax and National Insurance

(h) The costs of bringing an appeal before the First -tier Tribunal are usually fairly
modest. Parties bear their own costs and so a taxpayer who loses an appeal is not
normally required to pay HMRC's costs (unless the taxpayer has acted wholly
unreasonably). The costs of taking an appeal to higher authority can be very high and
an unsuccessful taxpayer may be required to pay HMRC's costs in defending the
appeal as well as his or her own costs.

Tax evasion

Taxpayers are required to provide information which is correct and complete. Dishonest
behaviour (e.g. concealing a source of income) is known as tax evasion and is against the
law. On summary convi ction in a magistrates' court, an offender may be imprisoned for up
to six months. If the conviction is obtained on indictment in a higher court, the maximum
prison term is seven years. In either case, a fine of any amount may also be imposed.

Tax avoidance

Taxpayers are entitled to organise their financial affairs in such a way that their tax burden
is minimised. This perfectly legal activity is kn own as tax avoidance. For example, a tax -
payer might legally avoid income tax and/or capital gains tax by moving funds into a tax -
efficient investment (see Chapter 6). Tax avoidance (which is legal) should be sharply
contrasted with tax evasion (which is not).
Tax avoidance is acceptable within limits but, over the years, tax advisors have shown
great ingenuity in devising very complex and highly artificial tax avoidance schemes to
exploit "loopholes" in the tax system. These schemes often result in a signi ficant loss of
tax revenue until eventually blocked by specific anti-avoidance legislation. So as to limit
the effectiveness of tax avoidance schemes, a regime known as DOTAS (Disclosure of
Tax Avoidance Schemes) has been introduced which requires certain disclosures by those
who devise such schemes or use them. A brief summary of the requirements is as follows:
(a) Those who promote and market schemes which bear certain "hallmarks" of tax
avoidance are required to provide HMRC with details of each scheme. Promoters
must provide a description of the scheme, including details of its tax consequences
and the statutory provisions on which it relies. The scheme is then registered by
HMRC and is allocated a registration number.
(b) Taxpayers using such a scheme a re required to quote the registration number of the
scheme in their tax returns. Taxpayers who develop their own "in -house" tax
avoidance schemes must provide details of each scheme directly to HMRC.
These rules are intended to provide HMRC with advance wa rning of tax avoidance
schemes, so enabling swifter and more effective investigation and counteraction.

12
 CHAPTER 1: Introduction to the UK Tax System

General anti-abuse rule (GAAR)

Finance Act 2013 introduced a "general anti -abuse rule" (GAAR) into UK tax law. This
rule applies to income tax, capital gains tax, inheritance tax, corporation tax and certain
indirect taxes. The aim of the GAAR is to counteract tax advantages arising from abusive
tax arrangements. Tax arrangements are defined as "abusive" if they cannot be regarded as
reasonable in relation to the relevant tax law, having regard to whether the arrangements:
(a) are consistent with the principles on which the relevant tax law is based
(b) involve any contrived or abnormal steps
(c) are intended to exploit any shortcomings in the tax law.
The GAAR empowers HMRC to make "just and reasonable" adjustments to counteract the
tax advantages that would otherwise arise from tax arrangements that are deemed to be
abusive. These adjustments may involve increasing a taxpayer's tax liability or imposing a
tax liability where otherwise there would be no ne. However, before making any such
adjustments, HMRC must comply with the following procedure:
(a) If an officer of HMRC considers that a tax advantage has arisen as a result of abusive
tax arrangements, the taxpayer concerned must be provided with a wri tten notice to
that effect. The notice must explain why HMRC considers the arrangements to be
abusive and must set out the proposed counteraction. The taxpayer then has 45 days
in which to make written representations in response to this notice.
(b) If, after considering any representations received from the taxpayer, HMRC still
believes that counteraction should be taken , the matter must then be referred to the
GAAR Advisory Panel (an independent panel establi shed for this purpose). The
taxpayer must be notified that the matter is being referred in this way and then has 21
days in which to make written representations to the Advisory Panel.
(c) The GAAR Advisory Panel considers the tax arrangements concerned and produces
an opinion notice, stating whether or not (in the opinion of the Panel members) the
arrangements are abusive. HMRC must then issue a notice to the taxpayer, setting out
whether the tax arrangements are to be counteracted.
(d) A penalty † will generally apply in cases where abusive tax arrangements have been
successfully counteracted by means of the GAAR. The penalty is equal to 60% of the
additional tax payable as a result of the counteraction (see Chapter 15).
Taxpayers may appeal against an HMRC decision to counteract tax arrangements. When
considering such an appeal, the tribunal or court must take into account the opinion
expressed by the GAAR Advisory Panel.
† The Government intends to introduce a penalty for the "enablers" of tax avoidance schemes which
are defeated by HMRC. The amount of such a penalty would be equal to 100% of the fees charged
by the "enabler" to clients who used the scheme in the hope of gaining a tax advantage.

13
PART 1: Income Tax and National Insurance

Making Tax Digital (MTD)

The Government has announced that it intends to replace tax returns with online "digital
tax accounts". These accounts will be phased in over the next three years and will be pre -
populated with information already held by HMRC (e.g. employment income, pensions
income, bank interest received etc.). Taxpayers will be able to visit their digital accounts at
any time and, in many cases, will not need to submit any information to HMRC at all.
Self-employed taxpayers and those with income from property will be required to use
MTD-compliant accounting software to record their income and expenditure and to update
their digital tax accounts every three months . However, there will be an exemption from
quarterly reporting for taxpayers with business or property income which does not exceed
a specified thr eshold (currently expected to be £10,000). There will also be an MTD
exemption for taxpayers who are "digitally excluded" , either on religious grounds or
because of their age, disability or location.
The proposed MTD timetab le envisages that businesses and landlords with annual
turnover which exceeds the VAT threshold (currently £85,000 (see Chapter 29) ) will be
required to start quarterly reporting as from April 2018. The proposed start date is April
2019 for those with turnover not exceeding the VAT thr eshold. It is also expected that
MTD will be introduced for companies as from April 2020.

The HMRC Charter

The HMRC Charter sets out the rights and obligations of taxpayers. The Charter explains
what the taxpayer can expect from HMRC and what HMRC expects from the taxpayer. In
summary, the taxpayer can expect:
• to be treated even-handedly and with respect and to be treated as honest
• to receive help and support from HMRC
• to be tackled if he or she breaks or bends the rules of the tax system
• that HMRC will be professional and act with integrity
• that HMRC will protect taxpayer information and respect taxpayer privacy
• that the costs of dealing with HMRC will be kept as low as possible.
In return, HMRC expects taxpayers to be honest, to take care to get things right and to
treat HMRC staff with respect.

The Adjudicator
An independent and impartial Adjudicator considers complaints made by taxpayers who
are not satisfied with the quality of the service they have received from HMRC. The
Adjudicator writes an annual report and makes recommendations for improve ments to
HMRC procedures and practices. The Adjudicator is not empowered to hear tax appeals.

14
Other documents randomly have
different content
do better, and live a different life. I want to deserve that he should
love me; and I will not allow him to have the love of another while I
am his wife.”
“I am afraid you have made some strange mistake,” I hastened
to observe. “Your husband is probably dead, and beyond the reach
of your love or your neglect. The gentleman you saw in a carriage
possibly resembled him strongly—such cases often come under our
notice. Mistaken identity? why, it’s as common as day. We had a
woman here the other day who insisted upon us arresting a man
whom she alleged was her husband, and she would not be
convinced till he brought his father and mother and a whole host of
relatives to prove that he was another man altogether, and had
never been married in his life. And even supposing your husband
were alive, how could you prevent him loving another? To retain a
man’s love is even more difficult than to win it, and can never be
done by running a knife into him, or throwing dishes at his head.”
“I did not do that; it was the drink did it,” she tearfully pleaded.
“He said I would never be better till the grave closed over me. You
heard him say so at the trial. But I think there’s a chance for me yet.
It’s a dreadful struggle to keep away from drink, but I win the battle
sometimes. No one knows what I have fought against; and I’m so
poor, and despised, and wretched now that nobody cares to ask. If I
were a black savage in a far off country, they’d send missionaries to
me and give me every comfort and help; but I’m only a white savage
living in Scotland; and I tell you I’m not mistaken about seeing my
man. I could not be mistaken. I saw him alive and well in that
carriage as sure as there’s a God in heaven.”
 “How could a poor factory worker like him rise to such a
position?” I incredulously remarked.
“I don’t know, but there he was sitting by the lady’s side and
looking as happy as he used to look when he was courting me; and
he saw me too, and turned as white as death at the sight. Perhaps
he thought I should die in prison for want of drink, and so married
again without waiting to see. I thought of going to his mother’s and
asking if he was really dead; but then I changed my mind, and came
here. It would be better for you to go; you know better how to get
at the truth.”
“You charge him with deserting you and marrying another
woman?” I said, scarcely able to restrain myself.
To this she replied with a wavering affirmative, and then she
produced the certificates of her marriage and of the birth of her
child, and gave me the address of her mother-in law. She then
described minutely the place and circumstances of the meeting with
her husband’s counterpart, and left the Office. She left her own
address also, but I had no expectation of ever needing that. It
seemed to me that the supposed fraud, forgery, and bigamy were
entirely the offspring of her own drink-sodden brain, and that to
ascertain that her husband was dead and buried would be so simple
a matter that there was not the slightest occasion for her putting the
task upon us. Still I remember thinking—“If the man is really alive, I
hope he will really be nimble enough to escape me. It would be an
actual blessing to such a man if the jade fell downstairs and broke
her neck.”
In the afternoon I went to the address of the mother. The house
was a small one in Greenside, but the woman appeared a
respectable widow, and I found her quietly preparing the supper of
her sons, two of whom supported her. She seemed a superior person
to be in such a situation; and noting that fact I guessed that her
son, though a poor worker, must have had some natural refinement.
I told her I had called to make some inquiries about her son, and
she probably thought I meant one of the younger members of her
family, for she smiled brightly, and invited me to enter. While I
accepted the offer I studied her quiet and somewhat shadowed
features, and quickly decided that I had before me a woman who, if
she had occasion, could throw as many obstacles in my way as any
one who ever hampered a detective.
“It is your son Richard, I mean,” I quietly continued, as I sat
down at the clean little fireplace.
The mother gave a great start, and I saw the hands busy at the
supper grow suddenly tremulous. She looked at me, too, but it was
not so much a look of surprise as of searching inquiry or suspicion.
“What about him?” she cautiously returned, when she had
recovered somewhat.
“I want to know where he lives, what he does, and all about
him,” I quickly answered. I fully expected her to blurt out, possibly
with tears, that her son was dead, but no such words rose to her
lips. She stared at me keenly for a moment or two, as if trying to
discover from my appearance what was the nature of my
occupation, and then she said—
“What are you? a sheriff-officer or something of that kind?”
“Something of that kind,” I lightly returned. “Now, about your son
Richard. Is it true that he is dead?”
 “I suppose that fiend that he married has sent ye here?” she said
with great energy; “but if she has, ye’ll get naething oot o’ me.”
“Well, but you told her he was dead,” I persisted; “either he is
dead or he is not.”
“Ay.”
“And you showed her a certificate of death bearing his name?”
“Did I?”
“If you altered that name you committed a felony, and are liable
to arrest and imprisonment.”
“Am I? I’m no feared,” she answered, with a sneer and a toss of
the head.
“Will you let me see that certificate?”
“Humph! will I, indeed! Ye’ll see nae papers here, I can tell ye.”
“We can force it.”
“Force awa’ then—naebody’s hinderin’ ye.”
“Come, come now—it is quite evident to me that you have
something to conceal,” I said, fairly baffled.
“Everybody has,” she grimly returned.
“Perhaps your son has paid you to be silent?”
A flashing look was the answer; it said scornfully—“As if that
would be necessary!”
“Did you forge the certificate?”
“Humph!” The grunt was utterly derisive of me and my powers.
After trying her for nearly half an hour I gave the old woman up in
despair and left, determined to overhaul the books of the registrar
for the district. I did so for a period extending over the two years,
but could find no record of such a death. I had not expected to find
it. The strange reticence of the mother had convinced me that I had
misjudged the broken wife, and that the man was really alive. My
visit to the registrar was productive of one discovery, however, which
pointed to a solution to one mystery. I found recorded the death of
one Richard Hanford, aged 58 years, spouse of the old woman who
had proved so intractable under my questioning. By referring to the
broken wife I discovered that she had never thought of looking at
the age of the deceased as recorded in the certificate; and I had a
strong suspicion that it had been the certificate of the father’s death
which had been shown her, with a view to severing the connection
for ever.
Back I went to the old woman’s home, only to find her flown, and
the house shut up and empty. She had taken alarm, then, and
deemed flight the most easy way out of her difficulties.
I had now no clue whatever to the discovery of Hanford, and,
truth to tell, was not sorry. I heartily hoped that he, too, had taken
alarm and left the city, and that I should thus hear no more of the
case. But the broken wife, from the hour of the first meeting, had
never rested. She was continually on the prowl, never going to her
work, seldom eating or sleeping, and almost forgetting to drink. The
result was that one night, in watching a quiet hotel or boarding-
house at the West End, she saw a man come out and hurry towards
a waiting cab, and flew across and pinned him in her arms with his
foot on the steps.
“Dick! Dick Hanford! look at me and say why you have tried to
make me believe you were dead?” she cried in frenzied tones.
The man was alone, and did not seem greatly surprised, though
he was labouring under great excitement and emotion.
 “Call me John Ferguson,” he said, tremulously, without trying to
push her off or escape. “Dick Hanford is dead—dead to everyone.”
“Not to me, for I am still your wife,” she excitedly returned. “Oh,
Dick! I am bad and weak, and foolish—maybe mad at times—but I
love you; and I want to be better, and get back my bairn that they
say I nearly killed. I think it would keep me from falling. Oh, give me
one more chance! I thought you were both in the grave, and that I
had put you there, but when I found you alive a new life seemed to
spring up in me.”
“Call me John Ferguson—Dick Hanford is dead,” he still
answered, in low husky tones.
He dismissed the cab, and motioned to the broken wife to follow
him out to the dark road beyond the city, where they could converse
unseen and unheard. He would not say he was married to another
woman, nor would he admit that he was Hanford, or this broken
woman’s husband; though his grave, earnest manner, his
gentleness, and every thrill of his voice, convinced her of his identity,
if such convincing had been needed.
“I am nothing to you, or you to me,” he said; and with a pang
she noticed that he never even touched her or offered her his arm.
“We are strangers; our ways are different—far apart; just as much
sundered as if we were both dead, and buried at different sides of
the globe. But I have money now, and I am willing to give you that,
if it will do you any good, just to relieve my own mind, if you will let
me go in peace. Why should we fight over a dead past? Say how
much you want, and it shall be yours, though it should be every
penny I own.”
 “I don’t want money, but the bairn I nearly killed,” cried the
weeping wife. “Money would curse me, but the bairn might lift me
up. I’m not the first lost woman who has been pulled up to heaven
by a bairn’s wee hand.”
“That can never be,” said the husband, decidedly. “More likely
you would drag him down with you. Be content with the ill you’ve
done. Freddy is dead.”
“I don’t believe it,” screamed the broken wife. “He is hidden from
me, not dead. I will make a bargain with you. If your love for me is
dead, go your way in peace, but leave me the bairn. I’ll sell my
rights for him. Is it a bargain? or must I put you in prison?”
“You can do neither,” was the agitated reply. “You cannot put me
in prison, and you cannot touch the boy. You will never see him
again. He is far beyond your reach.”
They quarrelled over that point, and had to separate without an
arrangement. Janet Hanford came to me the same night, demanding
that I should arrest the “bigamist,” as she declared him to be, and
also hunt out her boy, wherever he was hidden, as the care of the
child would legally fall to her, who had committed no offence against
the moral law. A light task, certainly!
In the first place, I found that the accused persisted that he was
not Richard Hanford, but John Ferguson. He had been at the Cape
for nearly two years, so he had no one to whom he could refer in
confirmation of his statement. He was very hazy as to his
antecedents. He had prospered at the Cape, he admitted, but would
not say that the money he now possessed had come to him by
marriage; he would not admit that he was married at all to the lady
who accompanied him, though it was proved that at the private
hotel at which they resided they were known as Mr and Mrs
Ferguson. The lady herself, being referred to, declined to say
whether she was married or not; and when she took up that
position, I need not say that our chance of bringing home to him a
charge of bigamy became poor indeed. Then there remained the
charge of desertion, but that could scarcely be brought forward,
seeing that the wife had been in prison, serving a term of two years,
while he had been away at the Cape and had but recently returned,
and so might be supposed not to know that she was alive.
But the weaker Janet Hanford’s case grew, the more determined
and desperate she seemed to become. John Ferguson’s wife had a
maid-servant to attend her, and Janet Hanford appears to have
taken to watching the girl. One forenoon, when the case was at its
most critical point—that is, when there were evidences that John
Ferguson and his wife would soon be out of the country—the broken
wife saw this girl leave the hotel with two letters in her hand. The
girl walked rapidly along Princes Street, with the intention of posting
them at the General Post Office; but before she had gone two
divisions, Janet Hanford became a highway robber, by snatching the
letters from her hand and vanishing like magic. One of the letters
was addressed to “Master Frederick Hanford,” at a boarding-school
some miles from the city; and almost before the amazed girl got
back to her master, Janet Hanford was in a railway carriage and
speeding towards that school.
The letter she had stolen proved beyond a doubt that John
Ferguson was Richard Hanford, and father of the boy, and also
revealed the fact that it had been Hanford’s intention to remove the
boy in a day or two, as he was “leaving the country.” Janet Hanford
stopped all that by taking a policeman with her, and demanding that
the boy—who readily recognised her as his mother—should be
delivered up to her. The grief and consternation of the father were
terrible to behold, and we had now the singular case of two persons
charging each other with a crime, and each demanding the other’s
arrest.
Hanford made the most strenuous attempts to get back the
custody of his boy—who was lame and rather weakly—but failed
completely, though he had money and lawyers to help him. An
inquiry had been by that time despatched to the Cape, to ascertain
whether the so-called John Ferguson had been legally married to
Rosa Gladwin, the girl who in Scotland had passed as his wife. In
anticipation of the answer to that question being against him,
Hanford redoubled his exertions to quicken the slow processes of
law which were to give him charge of his boy; but with almost the
same result as if he had single-handed tried to push on some great
Juggernaut. The ponderous thing moved none the faster, but all the
heat and turmoil and excitement fell to Hanford. He was continually
running between his temporary home and his lawyers, and in one of
these races he caught a chill which he “had not time to attend to.”
When the pain became unbearable, he was forced to lie down
and send for a doctor. By that time he was almost delirious and in a
high fever. The doctor pronounced the trouble inflammation of the
lungs, and the case critical.
The moment Janet Hanford heard of the illness she came to see
her husband, bringing with her the boy, whom she had hitherto kept
studiously out of sight. She was loud in her self-recriminations. She
blamed herself for the calamity; in grovelling grief cried aloud to
heaven to witness her vow, that if Hanford’s life were only spared
she would restore his boy, suffer him to leave the country with his
father, and nevermore seek to molest either, or wish for anything but
their welfare and happiness. The cry was vain; the resolve came too
late. Hanford scarcely knew her, and appeared to be living the
misfortunes of his life over again; for when his eye did light on her
face, he implored those present to take her from him, or at least to
save the boy from her remorseless hands. In a day or two he died,
to the very last turning from her with aversion, and speaking of his
other attendant as his true and only wife, and denouncing Janet
Hanford as a curse to herself and all mankind. Of course these
delirious utterances could not be taken for his real feelings; indeed,
his second wife afterwards assured Janet that the love he bore her
was greater than that which he had conceived for herself—it was
merely the outside shell of wretchedness and debauchery which he
loathed and detested. There was no more concealment of the truth
then. It was freely admitted that Hanford had married again out at
the Cape, getting a rich settler’s daughter and a little fortune by the
union, as well as the unselfish devotion of a woman who knew the
whole of his past life, and yet did not hesitate to sacrifice her all for
his sake. A strange result sprang from that death-bed scene. The
second wife imbibed a strong affection for the lame boy, and could
not think of parting with him; at the same time a feeling of pity grew
up in her breast for the broken wife, who was so prostrated by her
great loss that for weeks her life was despaired of. Rosa Gladwin
nursed her through it all, and, I suppose, must have discovered in
her some good qualities which were hidden from ordinary onlookers,
for when Mrs Hanford fairly recovered they did not separate. At first
Rosa offered to provide for her by settling on her an annuity quite
sufficient for her wants, but the proposal was never carried out.
They went out to the Cape together, and no sisters could have been
more firmly bound together in affection. Neither of them ever
married again, but their lives have been spent in watching the
development of Hanford’s son, who is no longer a lame boy, but a
strong man, bidding fair to leave a big mark in the world’s history.
The most singular thing in the case, however, is the fact that Janet
Hanford left her drunkenness and debasement in the grave which
swallowed her husband. Truly there is hope for all, even for the
White Savage.
 THE BROKEN MISSIONARY.
The place was called a church, but it was really little more than a
mission-house thrown out and partly supported by a religious body
in Edinburgh wishing to extend its connection. The town is a few
miles from Edinburgh, and the building used for the church had at
one time been used as a school, then as a slaughter-house for pigs,
and at last, with a little painting and fitting up, as a church or
meeting-house.
It is not necessary to name the particular sect of which this small
church was a part. All churches are formed of men and women, and
with these there is always to be found some twist of character, which
we, who are twisted in another direction, call an imperfection. Such
men as the deacon in the following case may be found in almost any
church—men of strong convictions and great pugnacity, who are
such heroes for virtue that they never think it possible to fall on the
other side.
The little church had no vestry, and but one door, so the minister
and congregation all entered from the front. Just within the door
there was a small partition, and a folding door to keep the draught
off the congregation during the assembling, and conspicuously in
front of that, and facing the outer door, stood a three-legged stool
bearing a big pewter plate for contributions. The contents of this
plate were in general so scanty that they might easily have been
counted by the eye, but occasionally, during the summer, visitors
from the city would drop into the little place and leave in the plate a
practical proof of their interest in the struggling church. After the
services, it was the duty of the deacon or deacons to count the
collection and place the sum to the credit of the general fund of the
church. The minister or missionary, Arthur Morrison by name, was a
young man with a wife and two children, who was struggling vainly
to exist upon £55 a year. He had striven hard, but had so far failed
that he was considerably in debt to different tradesmen about the
town. He could scarcely be blamed for that, for his wife was a
delicate woman, and most of the expenses had been forced upon
him on her account. There was little prospect of his position in that
town improving, as only a part of his salary was made up by the
church, the rest being a grant from the main body; and as he was a
quiet mild fellow, with no great energy or ability, there was little
chance of him being sought after by a richer congregation. The poor
fellow, however, seemed very earnest and sincere, and to love the
work, and had never uttered a word of complaint to one of his
people during the three years he had been among them.
That was the position when an incident occurred, so curious and
so strange in its results, that it is necessary to put it down minutely,
and exactly as it was afterwards narrated by the chief witness in the
case, the deacon himself.
It was immediately before the morning service, and the
congregation had nearly all assembled. The Rev. Arthur Morrison
had not arrived, but an agreeable incident had kept the deacon who
stood at the plate from noting the fact. A lady, evidently a summer
visitor of wealth, had put a bank note into the plate, and asked to be
shown to a seat as graciously as if she had been in the finest
cathedral in the world.
The deacon was a man named Thomas Aikman, a baker by
trade, a sharp business man, who considered himself the main pillar
of that church. He fluttered into the building and showed the
distinguished visitor to his own pew—if pew it could be called—
placed books before her, and returned to the plate. There was an
interval during which no other worshippers entered, and Mr Aikman
spent the time in admiring that bank note as it lay in the plate,
contrasting so deliciously with the thin strata of coppers below. It
was a crisp note of the Bank of Scotland, and so new that it would
not remain folded. Of course it had a number, and that number Mr
Aikman declared he could not help noting, as the paper lay open
before him. He did not mark down the number—did not think of
doing so—but he had a good memory, and he could trust to that,
and swear by his convictions.
As he gazed the deacon rapidly ran up in his mind all that this
bank note would do. There was a trifling debt on the building fund,
and this would all but clear it off. There would be no difficulty in
getting the other managers of the church to agree to that; they
were afraid of the stout and pugnacious baker, and always hurriedly
agreed to whatever he thought fit to propose.
While he was settling this matter another stranger appeared, and
placed a silver coin in the plate, at the same time asking to be
shown to a seat. The half-crown which this gentleman dropped into
the plate rested on the bank note already there, and thus the two
contributions were left while the deacon went inside and showed the
gentleman to his own form. Not a minute was occupied in the task,
and during the interval only one person entered the church. That
person was the Rev. Arthur Morrison, who appeared heated and
flushed as he pressed past the deacon and made his way to the little
desk from which he preached. Mr Aikman went straight back to his
post at the plate, and the bank note being still prominent in his
thoughts, he glanced at once in that direction. Then he started and
rubbed his eyes. He himself had been the last to leave the spot—for
the gentleman had preceded him into the church—and then the
bank note lay in the plate all right, with the half-crown safely
weighting it; now, when he got back, the note was gone. The half-
crown was there—shining like a white disc among the coppers, but
not a vestige of paper money was near it. The deacon looked
around. There was no wind, but the note might have got over the
edge of the plate, and fallen to the ground. No; it was not in the
vestibule. Aikman darted outside; there was not a human being in
sight. He staggered back again and stared at the plate till his
goggling eyes might have speared a hole in it. There could be no
doubt about it—the church had been robbed, and was the poorer by
£5 of the deacon’s momentary absence. He had no one to advise or
assist him, the other deacon on the list having failed to appear, and
felt doubly angry and excited over the strange loss from having
already mentally decided how the money should be utilised. He was
in a fever of bewilderment, perspiring in every pore, and even madly
thrusting his hands into his own pockets to make sure that the note
had not fluttered in there. Then, after another dart outside to make
sure that no prowling thief could have been near, the deacon did a
little mental reasoning. No one, so far as he was aware, had entered
the church during his absence from the plate but the minister. Could
it be possible? No, never! Well, yes it might be. The man was poor
and needy, and he might consider the drawings at the door as in a
manner his own, or intended for him. Mr Aikman had an old grudge
at his minister, who had once dared not only to correct him on some
theological points, but had satirized him in a quiet way as well. The
man who could utter a joke at the expense of a great man like
Aikman was fit for anything, and the bank note could not have gone
without hands. The deacon began to understand the whole mystery,
and put up the collection and closed the door to go inside and listen
to the sermon in no frame of mind to profit by the discourse. At
every telling point in the oration Aikman turned up his nose, and
mentally exclaimed—
“How can he, with that stolen £5 note in his pocket!”
On the whole, the deacon felt more of pity than of anger at the
cool appropriation, but he determined that the minister should know
that the robbery had been discovered. How best to make the
revelation exercised Aikman’s small brain pretty closely during the
service. He had not quite settled the matter when the benediction
was pronounced. As the lady who had made the handsome gift
handed him back the books she had used, and made some remarks
about the church, a happy idea struck the deacon. He boldly
thanked her for her liberality, and then concluded by asking her—
much to her surprise—if she knew the number of the note she had
put in the plate. She did not; and as she was too polite to ask the
reason for inquiry, no more passed between them, and the lady
departed and was seen no more. Had Mr Aikman been of a less
active disposition the matter might have ended there. No one had
seen the bank note but himself, and it was now gone through no
fault of his. But then there was the minister, and the suspicion, and
his own old grudge. He could not remain passive.
When all the congregation were gone Aikman steadily fixed the
young clergyman with his ferocious eye, and said—
“There was one lady very good to us to-day—she put a £5 note
in the plate.”
A slight flush overspread the pale face of the young preacher,
and he said a little hurriedly—
“Ah, indeed? I am pleased to hear that. Excuse me just now; I
must hurry home.”
He moved away abruptly, and the deacon stood staring after him,
now thoroughly convinced of the soundness of his suspicions.
“A minister of the Gospel to descend to a mean theft like that!”
he said to himself. “I must call a meeting of the managers and
report the whole case.”
It happened to be the month of July, and there was a difficulty in
getting a quorum of the managers together, but at length Aikman
was promised a full meeting, which took place on the Wednesday
following in his own house. There, after shutting themselves in, and
making sure that no one could overhear, the four men considered
the case of the stolen bank note. Of course they were shocked at
the implied guilt of one whom they revered and trusted so much,
but Aikman piled up his facts in such a minute and positive manner,
that even without additional evidence there would have been little
diversity of opinion among them. At this stage, and when Aikman
had scarcely concluded, another of the managers quickly
exclaimed—
“Why, Mr Morrison changed a £5 note with me yesterday.”
 “Yesterday?” echoed another, to whom the minister owed a small
sum. “And he told me on Saturday that he had no money, and would
not have till next quarter day.”
“There! What did I say?” cried Aikman with triumphant energy.
“Could anything be clearer than that? I know for a fact that he has
no money—it is all eaten up long before it is paid to him by me; yet
there you have proof that near the end of the quarter he pays away
money, and that a £5 note. Have you the note yet?” he added to the
man who had received the payment.
He had, and would run and get it. A wiser plan would have been
to first make Mr Aikman describe the note put in the plate, and write
down its number, and then send for that received from the minister,
and compare the record with the note, but that was never thought
of. The other deacon had only half a street to traverse, and was
back in a few minutes with a crisp bank note. It was of the Bank of
Scotland, and nearly new. Mr Aikman snatched it from the bearer—
opened it, glanced at the device and the number, and then
exclaimed—
“It’s a clear case! look at the number for yourselves, ‘7607’—the
very figures of the one I saw lying in the plate. I couldn’t help
reading them, for the note lay open, and I never forget anything.”
A painful silence followed. At length some one asked the question
which was uppermost in all their minds—What was to be done? They
could not pass over the robbery in silence, and yet it would be a
delicate and possibly a dangerous thing to charge a clergyman with
such a theft.
“Nothing dangerous about it,” said Aikman, brusquely. “I can
swear to the note being put in the plate, and the number, and the
name of the bank; also, that the minister was the only one near the
plate while I was absent for half a minute; and you can swear that
he paid away the note to you and got change. What’s to be done?
Shall we ask him to resign, demand the money back, or give him up
to the police to be dealt with as they think best?”
It was quite clear to all present which of these courses Mr
Aikman wished followed, and they unanimously decided that the
most rigorous course was necessary in dealing with such a criminal.
Mr Aikman was therefore deputed to lay the matter before the chief
constable of the town, who, however, happened to have a personal
acquaintance with the young clergyman, and a great liking for him
as well, and not only scouted the idea of him stealing the bank note,
but strongly urged Aikman to say nothing of the matter to his
minister, whatever other means he might employ for the recovery of
the note.
Finding it impossible to move the deacon, the constable at length
compromised the matter by agreeing to go with Aikman to the
minister’s house—it was not a manse, but a little flat, up an outside
stair—and see if Mr Morrison had any explanation to offer. They
found the young clergyman at home by the bedside of his wife, who
was almost a confirmed invalid, and had been rather weaker than
usual for some days. The constable was moved at the sight of the
young preacher’s pale and concerned expression as he hung over
the invalid, but the deacon had no such qualms—he looked upon
these as indications of guilt, and would have blurted out the charge
in hearing of the sick wife but for a huge pinch on his arm by the
constable, who at the same time quietly nodded to Morrison, and
invited him to speak with them for a moment in the next room.
 “There is some difficulty about that £5 note which you paid away
on Tuesday to Blackie, the grocer,” observed the constable, kindly;
while the deacon, as a duty he owed to society, steadily speared the
young preacher with his goggling eyes. “Would you mind saying
where you got the note?”
The righteous deacon had his reward, for the moment these
words were uttered, a startled look came to the worn features of the
minister, and his face flushed a deep crimson.
“I scarcely know myself,” he at length responded, with
considerable hesitation; “is it necessary that I should make that
known? What has happened? Is there anything wrong with it? Is it a
forged note?”
“Oh, no; the note is good enough,” cried the deacon, sternly, still
using his spears liberally; “as good as any ever put out by the Bank
of Scotland. The lady who put it into the plate on Sunday was not
likely to have a forged note in her pocket.”
The young preacher started as if the deacon had run a knife into
him. He seemed petrified, breathless, and dumb with astonishment.
“I do not know what you mean, or what you are hinting at,” he at
length replied; “but I know that the note you speak of could not
possibly have been in any lady’s pocket on Sunday, seeing that it
was then lying in my desk here, in this house.”
“You’ll have to prove that,” derisively returned Aikman. “Where
did you get it, and when?”
“I got it on Saturday afternoon,” answered the suspected man,
with calm dignity. “It came to me in an envelope, by post, and
without a line to indicate the sender. There were a few words written
inside the flap of the envelope, which I had not noticed when I put
the envelope in the fire. I snatched it out again and read them. They
were—‘For the little ones, from a well-wisher.’ I was quite
overpowered,” continued the young preacher, with a quiver in his
tones; “I had seen nothing but darkness and trouble before me, as
one of my creditors was pressing me sorely for money, knowing
perfectly that I had none. I went to God with my trouble in prayer,
and that was His answer.”
The deacon was horrified. That the minister should steal the note
he could readily understand, but that he should account for its
possession in such a manner showed a depth of depravity and a
hypocrisy which he had not conceived possible to dwell in man.
“You have the envelope, of course?” he sneeringly observed,
after a significant silence.
“No; unfortunately I have not. I put it into the fire in case my
wife should see it, and—and be pained by the thought of me having
to accept such help from an unknown friend.”
The deacon looked at the constable with a significant jerk of the
head. It was quite evident they could make nothing of a man so lost
in wickedness, and so ready with plausible excuses. The constable,
however, appeared to be foolishly overcome by the cunning reply of
the culprit, and made no remark. It therefore devolved upon Aikman
to make a noble stand for honesty and religion.
“Mr Morrison,” he impressively began, “that bank note which you
paid to Blackie the grocer was put in the plate on Sunday by a lady. I
saw it, and read the number of it as it lay. After you had passed the
plate, it had vanished. Either admit your crime, or take the
consequences.”
 “Now—at last—I understand you,” answered the minister, with
more dignity and calmness than his accuser. “You accuse me of
stealing the bank note?”
“We do, upon the clearest evidence,” snorted the deacon.
“Then I deny it emphatically,” said the accused, almost smiling. “I
cannot believe you to be in earnest. Steal it! why should I do that? It
was put there for the general benefit of the church, I suppose, and
that includes me, doesn’t it?”
“So you thought when you took it, I’ve no doubt,” angrily
returned Aikman, “but you will find yourself grievously mistaken.
Constable, I charge that man, in the name of the managers, with
the theft of £5. Do your duty.”
Matters had now become serious, but the gentleness of the
constable smoothed away much that might have been painful.
They walked together to the house of the Fiscal, and, after an
account of the circumstances had been gone over, the young
minister was allowed to go back to his home on his own
recognisance.
The next day I had a visit from the young minister, in at the
Central, in Edinburgh. I have but a faint recollection of the interview,
but I remember that he appeared greatly excited and agitated, and
ended his somewhat incoherent statement of the facts by imploring
me to take up the case with a view to—what think you?—with a view
to convicting Mr Aikman of perjury or conspiracy! The reasoning of
the young clergyman was this:—No one but the deacon had seen a
£5 note in the plate, and he alone had reported the note stolen—
therefore the note might never have been there at all! From this
followed the deduction—the deacon from his old grudge had got up
the whole as a revenge on the young preacher to injure his
reputation and force him out of his post. In consequence of this
appeal I went out to the place and made some inquiries, but was
met almost at the outset with clear proof that a £5 note had been
put into the plate. The lady who had been the donor was gone, but
at the hotel in which she had been staying the landlord had heard
her mention the gift to her husband.
The case was tried shortly after at the Burgh Court, the accused
conducting his own case. From the evidence led few could doubt the
guilt of the poor preacher the deacon was so cool, and clear, and
positive in all his statements. On one point alone did he show
confusion, and that was regarding his noting the number of the note
while it lay in the plate. Here the deacon, from his very evident
desire to make all clear and firm, contradicted himself slightly, and
then floundered worse under a very simple question from the Sheriff,
and was put down in confusion. The result was that the case was
dismissed—quite an unsatisfactory result to both parties. The deacon
was enraged—having recovered from his momentary confusion, and
being now ready with a clear and minute explanation—and the poor
minister was quite broken down under the disgrace. When he
returned to the town which had brought him so much suffering, he
met with so many cold looks from those whom he had believed to be
his warmest friends, that he was almost forced to resign his charge.
The resignation was accepted with a promptitude even more
crushing to his spirit; and then, while he was making preparations to
leave the place, his creditors swooped down on his few possessions,
and left him and his family with little but the clothes in which they
stood.
 Morrison appeared to bear it all with calm dignity, but his wife,
who was a quick-tempered, high-spirited woman, though delicate,
felt the disgrace keenly. They moved in to Edinburgh, and Morrison
tried hard to get another appointment, but in vain. The ban was
upon his reputation—his name had appeared in connection with an
accusation of mean thieving, and he was looked upon with suspicion
even by strangers. At length he got employment for a few hours
daily in keeping a tradesman’s books, for which he got nine shillings
a week, and with that and a little copying and tuition he managed
for a time to keep himself and his family alive.
But poor diet and a mean habitation among the very roughest
characters soon broke the spirit and constitution of his wife, and she
passed out of his arms into her long rest before a year was gone.
One of the children followed in three months, and he was left alone
with the baby. He struggled on quietly and without complaint,
shunning all, but ever ready when sought for to go and pray and
converse with any of the sick or dying among the very poor who
might express a wish for his presence. He became gaunt and thin,
and the tradesman who employed him told him he needed a change
of air.
I met him more than once in some of the lowest slums, but I
failed to recognise the bloodless face and stooping figure. I knew
him as “the broken missionary,” and it was dimly understood that he
had either been in prison or found guilty of some offence against the
law, though the poor wretches with whom he conversed and prayed
declared their firm belief in his purity and innocence.
One day, at that time, I found a stout, red-faced man waiting for
me at the Office, who nodded to me, and appeared greatly pleased
at seeing me. I had to tell him that he had the advantage of me, and
then he introduced himself as Mr Aikman, the deacon who had
figured as such a prominent witness in the case against the minister.
“I have been a cruel wretch, and I deserve ten years in prison for
the misery I have brought on an innocent man,” he said, shedding
tears freely—great hot tears, genuine as genuine could be. “A lady in
delicate health belonging to our congregation was ordered to live
abroad, and came back only yesterday. The moment she heard of Mr
Morrison’s disgrace, she came to me and said that it was she who
had sent the £5 note to the minister. She sent it from Edinburgh just
as she was setting out. I am a sinful and wicked man! God help me!
If I could only find out where he is—if you could help me to that—
there is no atonement or reparation I should think too great to make
to him and his poor wife and bairns. Every penny I have shall be
spent in the effort.”
I remembered the case then, and immediately set about tracing
Morrison, a task which would have been easy indeed if I had
thought for a moment of him being identical with “the broken
missionary.” At length I came upon a solicitor who occasionally
employed Morrison to copy deeds, and by him was referred to the
tradesman who employed the broken man to keep his books. It was
only when we were near the hovel which Morrison called his home
that the idea flashed upon me that the broken missionary was the
man I was after. I knew where he lived, and went straight to the
house, which tallied perfectly with the description given by the
tradesman.
When we knocked at the door a low voice told us to “Come in,”
and on entering we saw only a child of eighteen months creeping
about the floor in great glee, with a doll of rags in its hands. But a
glance round showed us where the voice had come from. There was
a bed behind the door, and in that there was a pale, bloodless face,
and a pair of shiny eyes, bearing a shadowy resemblance to the man
we sought. The broken missionary feebly attempted to raise himself
upon his arm, while the deacon rushed forward, dropped on his
knees before the bed, and hid his face and tears in the thin wasted
hands he had clasped.
“My poor wronged minister!” he exclaimed; “say you forgive me.
We have found out the lady who sent you the £5 note; and I know I
have been cruel and wicked——”
A strange convulsion passed over the ghastly face and sunken
features of the missionary, while his great eyes appeared to shine
out with a perfect radiance.
“Bless the Lord, O my soul, and all that is within me bless his
holy name!” he fervently exclaimed, as the great eyes became soft
and beautiful with tears.
The child on the floor crowed with delight, and hammered
vigorously on the floor with the head of its doll of rags. The deacon
gathered the thin form of the sick man in his arms, and hurriedly
breathed out all his plans for reparation. He would carry him back
with him to his own home; he would care for him, and send him
away to the country, to fresh green fields and cool shady woods,
where he would have nothing to do but take his fill of the balmy air,
and draw health from the glorious sunshine. But the grey head was
shaken on his breast in quiet demur, with a pitiful look in the great
eyes as they rested on the laughing face of the neglected child on
the floor.
 “I am going to fair fields and a glorious country,” he feebly
gasped, “but not there—not there. God has sent his sunshine into
my soul, and I can depart in peace.”
He fainted away as he spoke, and it was long before he could be
restored. The deacon had a nurse and a doctor there in an hour, but
they came too late. In the dead of night, with the deacon clasping
his hand and wetting it with his repentant tears, the missionary went
quietly to his rest.
The child was taken to the deacon’s house, and trained and
educated, and finally sent to college, and now promises to occupy a
distinguished position in the profession which proved so disastrous
to his father.
The stolen bank note was never traced, but it was believed to
have been taken by a woman who had acted as chapel-keeper, and
who was afterwards sent to prison for a theft quite as mean, though
less disastrous in its results.
 A MURDERER’S MISTAKE.
A toll-keeper on the main road some miles south of Edinburgh was
standing at his open door watching the gambols of his two children,
when a weary traveller approached and arrested his gaze. There was
something uncommon about the dusty tramp when his appearance
could rouse interest in an old toll-keeper, accustomed to look with
indifference on every kind of wanderer that God’s earth can produce.
This one was an old man, tall and gaunt and white-haired. So far
there was a bond of interest between them, but with age the
comparison ceased, for the toll-keeper was stout and well-clad, and
had a comfortable expression beaming from every part of his face;
while the stranger was haggard, worn, and drooping, like one who
had got all that earth was likely to give, and did not care how soon
the giving ceased. Above the toll-keeper’s happy face was a ticket
intimating that he was licensed to sell tobacco; while in one window
a few bottles of confections and biscuits, and the words
“Refreshments and Lemonade” on a show card, summed up his
efforts at trading. The dusty tramp halted in front of the toll-keeper,
giving the stout man a full view of his poor clothing and fragile
boots, from which his toes were peeping, and his sharp eyes eagerly
devoured the intimation above the doorway.
“Good evening, sir,” he said quietly, as he fumbled among his
clothes for a pocket, and at length produced a penny.
 The toll-keeper in general was gruff enough with tramps, even
when they seemed disposed to buy his wares, but there was a ring
in the tones of this one which struck a chord of pity in his breast,
and he returned the greeting kindly. In front of the window showing
the biscuits and sweets was a wooden bench. The haggard one
limped towards this bench, saying in the same quiet tones—
“Might I rest for a bit on this bench?”
There was nothing arrogant or bold in this request, but rather a
ring of indifference or despair. It was as if he had said—“It doesn’t
matter whether you say yes or no, or whether I sit down or move
on, or drop dead by the way. The end is not far off either way.”
“Oh, ay, sit as lang as ye like; ye’re welcome,” said the toll-
keeper, heartily. “You look like you had come a far way?”
“I have, sir—a matter of four hundred miles,” said the white-
haired tramp, knitting his brows; then recovering himself, he said in
his former quiet tones, “I suppose you couldn’t let me have a
penn’orth of tobacco? I’ve on’y a penny left.”
“Hout, ay;” and the toll-keeper brought a liberal length of roll
tobacco, which the weary traveller grasped eagerly and paid for
promptly with his penny. He bit off a piece and chewed it fiercely, his
eye resting steadily the while on the face of one of the toll-keeper’s
children, a rosy-cheeked girl of seven or eight, who was gazing on
the gaunt face and figure in a species of awe.
“It’s good for killing hunger,” he observed, with his eye still
meditatively fixed upon the child; “not that I’ve felt much of it,” he
hastily added, as if in fear that the toll-keeper would think that he
meant to beg; “I haven’t had time to think of that. That’s a pretty
child,” he abruptly added, alluding to the girl.
 “Yes, but she’s not looking so well as she did,” answered the toll-
keeper, with a father’s pleased look at the compliment. “We nearly
lost her with fever a while ago.”
“Imphm!” grimly returned the white-haired tramp. “Mebbe some
day you’ll wish she had been taken. She’ll grow up to a fine lass, and
then some one will envy you of your bonny flower and crush it up in
his fingers, never thinking or caring to think that your heart’s inside
of it. You’ll go mad, then, and think how happy you could have been
smoothing the turf on her grave when she was a little child.”
“God forbid!” fervently exclaimed the toll-keeper, catching the
child up in his arms, as if to shield her there.
“God? What’s God got to do with it, I’d like to know?” cried the
white-haired tramp, with his hard tones rising to a despairing snarl.
“Is there any God? I never see him, though there’s plenty of devil
about—that everybody can see with their eyes shut. Look you, sir!”
he added, clenching one bony hand and smiting the palm of the
other in fearful excitement, “I’ve done with God for ever! When my
girl was like that little one I used to go to church o’ Sundays, and
feel pious and good, and have my heart full of softness and
gratitude. I’ve felt as if I could have took the whole world into my
arms to bless it. But that’s all gone now, and the devil’s the one I
speak to. He’s been with me all the way, cheering and helping me
over the weary miles, and I won’t turn agen him now when I’m near
the end of it.”
The toll-keeper shrank back before the terrible words and sudden
hurricane of passion which convulsed the speaker; then he gathered
the two children in his arms, and said softly to them—
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