Compensation Payments (Income Tax)

Oral Answers to Questions — Food Supplies – in the House of Commons on 19th April 1944.

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Photo of Major Abraham Lyons Major Abraham Lyons , Leicester East

asked the Chancellor of the Exchequer on what basis assessment is made for the purpose of Income Tax upon any sum of money paid as compensation for loss of profits or loss of user in respect of vehicles or other similar income-earning machinery put out of action consequent upon the default of one from whom such compensation is claimed.

Photo of Mr Ralph Assheton Mr Ralph Assheton , Rushcliffe

I am not clear as to the precise kind of case my hon. and gallant Friend has in mind. If he will let me have particulars of the case which is in question I will inquire into it and communicate with him.

Photo of Major Abraham Lyons Major Abraham Lyons , Leicester East

Is it possible to indicate the general principle?

Hon. Members:

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Photo of Mr Ralph Assheton Mr Ralph Assheton , Rushcliffe

The general rule is that sums received by a trader specifically as compensation for loss of profits form part of the taxable receipts of the trader. If the hon. and gallant Member will put a specific Question to me I will look into it.