Advertising Expenditure.

Oral Answers to Questions — National Finance. – in the House of Commons on 3rd February 1942.

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Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Willesden East

asked the Chancellor of the Exchequer whether he will consider the advisability of disallowing, for Income Tax purposes, expenditure on advertising which exceeds a reasonable proportion of the expenditure for advertising in the standard years?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

Under the existing law, the allowance or disallowance of expenditure on advertising as a deduction in computing the profits of a business for Income Tax purposes is determined by the same rules that apply to other items of expenditure, and I see no reason for introducing any differential treatment.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Willesden East

Does my right hon. Friend's answer mean that what is stated in the Question is, in fact, the existing procedure?

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Does not the whole of this expenditure come direct out of money which would otherwise go to more useful purposes?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

My hon. Friends will remember that I took power in the last Finance Act to deal with this and other matters, but if facts are brought to my notice, I will look into them.

Photo of Mr George Strauss Mr George Strauss , Lambeth North

In view of the fact that the present position is a public scandal, could not the right hon. Gentleman disallow advertisements of all goods which cannot be sold?

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Willesden East

Does not the reply of my right hon. Friend mean that unless some outside individual brings cases to the attention of the Revenue, nothing will be done?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

No, Sir. All I did was to invite my hon. Friends to give me information.