asked the Chancellor of the Exchequer if his attention has been drawn to the reorganisation proposals of certain limited companies to constitute themselves holding companies, and form new subsidiary companies to carry on the business of the original companies; how far such reorganisations will reduce the amount of Income Tax and Profits Tax payable by such companies; and if he will take steps to prevent any possible loss of revenue arising from these transactions.
Such a reorganisation might result in either an increase or a decrease in total tax liability, according to the facts of the particular case. My right hon. Friend has no information to suggest that amending legislation is called for.
Has the Financial Secretary or his Department seen a copy of the memorandum issued by a number of firms in which they specifically mention that this policy is being pursued to assist as regards taxation? Does the hon. Gentleman not consider it anti-social that these people should adopt this policy while the country is struggling for economic recovery and also in view of the excessive profits that have been made over the years?
I should not like to generalise about a particular case without having the facts of the case before me. Naturally, we are anxious to preserve the revenue, but there is equally the consideration that there must be some limitation upon the degree of interference by the State in the management of firms.