The increase in the standard rate of tax, although applying to the whole Income Tax year, will not become legally operative until the date of the passing of the Finance Act. Strictly, therefore, tax will continue to be deductible by reference to the rate of 4s. 6d. in the pound until that date. In order, however, to reduce as far as possible the necessity for subsequent adjustment, it may be found convenient, in the case of payments to be made between now and the date on which the Finance Bill becomes law, to arrange for deduction by reference to the increased rate of 5s. in the pound; but this is, of course, a matter between the payer and the recipient. The terms of the Finance Bill will, in any case, be such as to secure that, in cases where deduction of tax has been made, before the passing of the Act, by reference to the increased rate of 5s. in the pound, such deduction will, after the passing of the Act, automatically become a legal deduction as from the date on which it was made. In, view of the fact that the increased rate of 5s. is to apply for the whole year, adjustments will be necessary to make good under-deductions of tax in respect of payments made at any time before the passing of the new Finance Act, and the Finance Bill will contain provisions relating to these adjustments. I may, however, point out that, as regards dividends of British companies (other than dividends payable on preferred shares at a fixed gross rate per cent.), no question of any adjustment need arise. Under the existing law, the net amount of any such dividend will be taken for all Income Tax purposes to represent income of such an amount as, after deduction of tax by reference to the increased rate of 5s., is equal to the net amount paid.