§ 35. Mr. DU CROSasked the Chancellor of the Exchequer whether, in view of the necessity which exists for directors of companies to make provision for the future payment of Excess Profits Duty, it is intended that companies whose financial years ended during August, 1914, may take that year as one of the three pre-war years for the purpose of ascertaining the pre-war standard of profits?
§ Mr. McKENNANo, Sir. In many instantcs the results of such a year would be largely influenced by appreciation or depreciation of stocks immediately on the outbreak of war, and would not be a fair criterion for computing the pre-war standard of profits.
§ 36. Mr. DU CROS furtherasked whether, under Clause 35 of the Finance (No. 3) Bill, it is intended that directors, managers, travellers, or other individuals holding offices or employments partly remunerated by salary and partly by commissions and bonuses shall in respect of such commissions or bonuses be subject to the Excess Profits Duty?
§ Mr. McKENNAThe case of remuneration to directors is dealt with in Rule 5 of Part I. of the Fourth Schedule to the Bill. Commercial travellers are specially excepted. Persons engaged in the other capacities named would not normally be carrying on the business of a person taking commissions in respect of transactions or services rendered, and their vocations would thus not fall within the scope of the charge.
§ 38. Sir J. D. REESasked the Chancellor of the Exchequer whether a person, firm, or company liable to Excess Profits Tax for any accounting period may deduct from such excess profits a loss sustained by such person, firm, or company in respect of another and distinct business in which he or they are engaged?
§ Mr. McKENNAI would refer the hon. Member to the answer I gave to the hon. Member for the Exchange Division of Liverpool on the 14th instant. I am sending the hon. Member a copy.
§ 40. Sir J. D. REESasked whether tea and jute manufacturing companies, registered in India and Ceylon, will only be liable for Income Tax on their dividends, or whether such companies will also be liable to Excess Profits Tax?
§ Mr. McKENNAThe place of registration is not a conclusive factor. The charge to Excess Profits Duty extends to all trades or businesses owned or carried on outside the United Kingdom by persons ordinarily resident in the United Kingdom
§ 88. Mr. W. THORNEasked the President of the Board of Trade if he is aware that a number of firms owning 1602 vessels engaged in the mercantile trade at the outbreak of the War have made large profits out of the sale of these vessels at a greatly enhanced price consequent upon the conditions induced by the War; whether this profit, which is clearly a War profit, will, unless legislation is particularly directed towards it, escape taxation on the ground that it is a realisation of capital rather than a profit; if he is aware that vessels, and even whole fleets, have been sold at a profit of over 100 per cent.; and if he intends taking any action in the matter?
§ Mr. McKENNAWhere profits from the sale of ships constitute profits arising from a trade or business within the meaning of the Bill, they would be within the scope of the Excess Profits Duty.