New Clause. — (Repeal of s. 36 of 8 and 9 Geo. V, c. 15.)

Part of Orders of the Day — Finance Bill. – in the House of Commons on 8th July 1924.

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Photo of Mr Herbert Spencer Mr Herbert Spencer , Bradford South

This Amendment was put down on behalf of the Association of Chambers of Commerce. I appreciate the assurance that the Financial Secretary has given the Committee, but I think we might ask for some rather more definite assurance. I feel certainly that the Financial Secretary will agree with me in this. It is not an attempt in any way to enable the one-man company to dodge its Super-tax. I think the whole House agrees that the formation of a small company for the express purpose of not dividing the profits to dodge Super-tax is a thing we want to stop. But there are many companies which, for various purposes, do not wish to divide a great proportion of their profits. It may be that a company is in a bad financial position. There are hundreds of companies to-day, after the 1920 slump, who are only carrying on because their banks are allowing them to do so on the proviso that the profits shall go to reduce the assistance that the banks have given to them. If the members of that company do better, we do not ask for a moment that they shall be relieved from paying their Super-tax, but we do ask that if, for one reason or another, they decide not to distribute their profits, a reasonable arrangement shall be made between the Inland Revenue and the members of that company as to what a reasonable distribution is. At the present time the Commissioners of Income Tax have no power to make a reasonable arrangement. If they disagree as to the amount that should be divided, they are compelled to charge Super-tax on 100 per cent. of the profits. If the Financial Secretary will say that he will put in words which will meet that great hardship—and we do not want to assist anybody to dodge their fair Super-tax—I shall be only too glad, as my name is on the Amendment and as I am speaking as the secretary of the Associated Chambers of Commerce, to join my hon. Friend in withdrawing this Amendment. The Financial Secretary should bring in words to give a reasonable relief to the people who are unable, very often because of the financial pressure from their banks, to distribute their profits.