HC Deb 23 February 1888 vol 322 cc1218-9
MR. S. WILLIAMSON (Kilmarnock, &c.)

asked Mr. Chancellor of the Exchequer, On what grounds many Insurance Companies have been refused the right of compounding their transfer Stamp Duties, while certain other Companies, among others the "Alliance" and "Northern" Fire and Life Insurance Offices, have been allowed the facility afforded by the Inland Revenue Act of 1887; if he is aware that the advantage accorded to the Companies named is in proportion to their capital greater than the advantage which would have been reaped by some of the offices which have met with a refusal; and, whether he has any reason to suppose that Clauses 8 and 9 of the existing Customs and Inland Revenue Act, legalizing this compounding, were based by him on a financial miscalculation?


The hon. Member will recollect that the Customs and Inland Revenue Act of last Session gives no absolute right of composition. The power which it gives is reciprocal. The Companies who think it advantageous to themselves to compound have the right to apply to the Board of Inland Revenue, who, on their part, accede to such applications, or not, as they think it conducive to the public good. The great Companies have not applied to the Board in sufficient numbers to establish the basis for an average; and this knowledge has led the Commissioners to make a closer and more rigid examination than they originally; intended into the circumstances of each individual case when they found that the applications came mainly from those Companies whose shares commanded a very high premium. Let me illustrate the principle on which the Board of Inland Revenue have accepted or refused applications by the case of two Insurance Companies, one of which is mentioned by the hon. Member. In that case the annual amount received for transfer duty was £370, while the composition duty came to £275, showing a slight loss to the Exchequer; whereas in all cases of Insurance Companies which have been refused composition the percentage of loss would have been about three times as great. In the other case, in which the hon. Member is, I think, interested, the annual average transfer duty was £414, while the composition, if accepted, would only have been £92. Obviously in this case the composition would have been so unfavourable to the Exchequer as to make it incumbent on the Inland Revenue Board to refuse it.


asked, whether the same scrutiny was applied in the case of the "Northern" Company?


said, he had not got all the details in connection with that Company; but if the hon. Member would communicate with him he would give him the particulars.