HL Deb 11 December 1969 vol 306 cc651-3
THE EARL OF DUNDEE

My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether any guidance has been given to the Inland Revenue concerning the allowance or disallowance of bank overdraft interest as a deduction from taxable income.]

LORD BESWICK

My Lords, instructions have been circulated by the Board of Inland Revenue to inspectors of taxes concerning the provisions of the Finance Act 1969 relating to tax relief for payments of interest, including interest on bank overdrafts.

THE EARL OF DUNDEE

My Lords, is the noble Lord aware that the complexity of this matter has been enormously increased by the decision to make retrospective the disallowance of interest on old overdrafts incurred a long time ago? And is he aware that, particularly in the case of agricultural estates, where owners may have to go back ten or twenty years into their accounts to discover how much overdraft has been incurred, how much in respect of maintenance, which is disallowed, and how much in respect of improvements, which is allowed, the difficulty will be quite insuperable?

LORD BESWICK

My Lords, I agree with the noble Earl that there are many complexities about this subject. At the same time he will probably agree that the position which appertained before, under Section 200 of the Income Tax Act 1952, gave rise to an economic situation which was quite intolerable.

LORD INGLEWOOD

My Lords, could the noble Lord say whether a copy of the instructions to which he has referred has been placed in the Library, or could be placed in the Library, in order that some of these many complexities might be simplified in our minds?

LORD BESWICK

No, my Lords, a copy has not been placed and could not be placed in the Library. It is an internal instruction from the Chief Inspector to the inspectors of taxes. But there is a Press statement which sets out the matter in some detail and which I will send to the noble Lord; or, if he will wait till the New Year, a more comprehensive booklet is to be published.

LORD INGLEWOOD

My Lords, may I ask whether the noble Lord would also put a copy in the Library, because I do not suppose I am the only Member of this House who will be interested?

LORD BESWICK

My Lords, I would do that; but I think that the other booklet which is now being prepared and which will be issued in the New Year will possibly be more helpful. I think I should wait till then.