§ (1) Every warrant or cheque or other order drawn or made, or purporting to be drawn or made, after the thirtieth day of November, nineteen hundred and twenty-four, in payment of any dividend or interest distributed by any company, being a company within the meaning of the Companies (Consolidation) Act, 1908, or a company created by letters patent or by or in pursuance of an Act of Parliament, shall have annexed thereto or be accompanied by a statement in writing showing—
- (a) the gross amount which, after deduction of the Income Tax appropriate thereto, corresponds to the net amount actually paid; and
- (b) the rate and the amount of income Tax appropriate to such gross amount; and
- (c) the net amount actually paid.
§ (2) If a company fails to comply with the provisions of this Section, the company shall in respect of each offence incur a penalty of ten pounds.
§ Provided that the aggregate amount of any penalties imposed under this Section on any company in respect of offences connected with any one distribution of dividends or interest shall not exceed one hundred pounds.—[Mr. Snowden.]
§ Brought up, and read the First time.
§ The CHANCELLOR of the EXCHEQUER (Mr. Snowden)
I beg to move, "That the Clause be read a Second time."
This Clause provides that a company, with every warrant or cheque or other order drawn or made in payment of dividends or interest distributed by the company shall accompany it with a statement in writing showing the gross amount which, after deduction of Income Tax appropriate thereto, corresponds to the net amount actually paid and the rate and the amount of Income Tax appropriate to such gross amount; also the net amount actually paid. On the Committee stage of the Bill several hon. Members raised this question, and my hon. Friend the Financial Secretary promised that it should have consideration. This new Clause is the result of that consideration. It deals only with companies, and I hope that the Clause 238 now put forward will meet with the approval of hon. Gentlemen. If it should happen that after it has been put into operation it is found that other grievances exist, they, I promise, will be duly considered.
§ Mr. A. M. SAMUEL
I think the Chancellor of the Exchequer has met us very fairly, and I am much obliged to him for so doing. The Clause will do a great deal to remedy the grievances complained of. I note what the right hon. Gentleman says that if it is necessary, after finding how the Clause works, to deal with other points, he will bring in a proposal to meet the difficulty, and I thank him for that. May I make one or two suggestions? Does he not think it would be a good thing to have a common form on which dividend statements should be made? A common form was used in the Rent Restrictions Act, and I think there need be no difficulty about doing it in this case. I could draft a form in about twenty minutes which would help the companies a good deal and save a lot of trouble later on. Let us have a common form to apply to all companies. The other proposal I have to make—whether it should be enacted by law I do not say—but it is that the companies should be asked to state on their dividend statements for what period they pay. It is very difficult for an elderly person to know, when claiming back deductions, whether they shall be paid back at the rate in force when the claim was made, or whether they should be repaid at the rate during the time the earning of the dividend occurred. I understand the right hon. Gentleman to indicate that this Clause will give effect to my suggestion that the dividend statements should state for what period the dividend takes effect.
§ Sir KINGSLEY WOOD
I also would like to thank the right hon. Gentleman. He kindly granted me an interview on this matter, and I then ventured to suggest to him what might be done by way of amendment of the rule. Everyone will recognise that this new Clause is a convenient method of dealing with the question. If I may respectfully say so, I think the Chancellor of the Exchequer is wise in, at any rate, in the first instance, in limiting this to companies. It is more likely to be followed up in that way. The other suggestion would have brought 239 in all sorts of people and would have been very difficult to follow out in practice. I am glad the Chancellor of the Exchequer has put substantial penalties into the Clause, although I have no doubt that the majority of the companies up and down the country will immediately follow up the suggestion that has been made. It is a small matter, but I believe it will give assistance to a large number of people, and for that reason I thank the right hon. Gentleman for his concession.
§ Clause read a Second time, and added to the Bill.