Purchase Tax

Oral Answers to Questions — National Finance – in the House of Commons on 8th October 1942.

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Photo of Sir John Mellor Sir John Mellor , Tamworth

asked the Chancellor of the Exchequer why, in some cases, is the value for Purchase Tax purposes higher than the maximum price at which the trader, who accounts for the tax, may legally sell the goods; and whether he will take steps to relate the said value to the said price in such cases?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

Under Section 21 of the Finance (No. 2) Act, 1940, the value for purposes of Purchase Tax is required to be the price which the goods would fetch on sale by wholesale to a retailer in the open market. Certain traders by reason of the buying advantages they enjoy are in a position to sell certain goods at a price lower than the trade in general and some of these privileged traders' selling prices may be governed by a Price Control Order. But that is no reason why less than the statutory tax should be paid thereon to the detriment of their competitors in business.

Photo of Sir John Mellor Sir John Mellor , Tamworth

Has the Chancellor looked at Notice 79A issued by the Commissioner of Customs and Excise, in which it is stated that Purchase Tax values and maximum prices are entirely distinct and unrelated? Will my right hon. Friend explain the sense and justification of that?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I will look at that document, but the facts are as I have stated.