§ Mr. GRETTONasked the Chancellor of the Exchequer if the amount of the new Licence Duties as exacted under the Finance Bill will be deductible from profits, if any, assessed for Income Tax under Schedule D; and, if so, whether the proportion of the new Licence Duty falling within the financial year ending 31st March last will be deducted from the profits in each case assessed for Income I Tax in the same financial year?
§ Mr. LLOYD GEORGEThe assessments on profits for the year 1909–10 were based on the average profits (after all admissible deductions, including Licence Duty) of the three previous years. Consequently no allowance falls to be made for 1909–10 in respect of the additional Licence Duty referred to.
§ Mr. GRETTONWill the right hon. Gentleman answer the first part of the question as to whether the amount of the new Licence Duties will be deductable from profits?
§ Mr. LLOYD GEORGEI have already given the answer. Does the hon. Member ask me in regard to next year?
§ Mr. GRETTONNo. For the present year.
§ Mr. LLOYD GEORGEFor the present year the profits will be reckoned on the average of the last three years.
§ Mr. GRETTONI understand the taxation the Government propose is to tax the profits for Income Tax.
§ Mr. LLOYD GEORGEIn the year when it is paid undoubtedly it must be taken into account. It must affect the profits and must be taken into account in the proper year.
§ Mr. GIBSON BOWLESDo I understand that in the proper year the Licence Duty will be allowed as a deduction from the profits?
§ Mr. LLOYD GEORGEAfter all it is a question of the actual profit made by the trader. At the present moment, before he arrives at his profit, he must take into account the licence fees, as well as other disbursements.
§ Mr. GIBSON BOWLESI entirely agree with the answer, but is the right hon. Gentleman aware that the Inland Revenue does not allow Income Tax to be so deducted?
§ Mr. GRETTONThis is a matter of importance. Do I understand that in the year when taxation occurs the Licence Duty may be deducted from the profits before they are assessed for Income Tax?
§ Mr. LLOYD GEORGELet us take the present year. When it becomes to be computed for the purpose of arriving at the average, it will be deducted from that particular year, and to that extent it may or may not reduce the profits.
§ Mr. LAWSONMay I ask the right hon. Gentleman whether he will not issue a special regulation to authorise a special deduction in view of the special circumstances?
§ Mr. LLOYD GEORGEI cannot issue a special regulation unless I am authorised by the Income Tax Act, and I am not aware that I am.