Excess Profits Tax.

Oral Answers to Questions — National Finance. – in the House of Commons on 17th February 1942.

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Photo of Mr Ian Hannah Mr Ian Hannah , Wolverhampton Bilston

asked the Chancellor of the Exchequer whether his attention has been called to the necessity under which new companies are laid in order to maintain or increase output constantly to increase their bank overdrafts, the 8 or 10 per cent. upon their working capital at present allowed being no substitute for the reserves at the disposal of well-established older firms; and will he receive a deputation on this subject?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I do not consider that the percentages of 8 or 10 per cent. are inadequate as representing a measure of return on capital for Excess Profits Tax purposes. As I explained to my hon. Friend in reply to his Question of 20th January, this percentage allowed on the capital employed in a business whether the capital is borrowed or owned. I would also point out that special provisions have been enacted under which relief is allowable for both Income Tax and Excess Profits Tax purposes in respect of exceptional depreciation of buildings, plant or machinery provided since the beginning of 1937. I shall be pleased to consider any particular cases that my hon. Friend may desire to bring to my notice.