§ 46. Sir HERBERT NIELDasked the Chancellor of the Exchequer whether he is aware that in arriving at assessable profits for Income Tax it has been the custom to allow as an expense the cost of renewing leases, the original cost and any premiums having been regarded as a capital expense, and that notice has been issued by the authorities at Somerset House to inspectors of taxes to disallow for the future the cost of renewing leases; and on what grounds has that been done?
§ Mr. CHURCHILLMy right hon. and learned Friend is, I think, under some misapprehension in this matter. It has always been, and still is, the view of the Board of Inland Revenue that these expenses are inadmissible as deductions for Income Tax purposes, being in the nature of capital outlay. The notice in question was issued last October in order to bring the views of the Board of Inland Revenue to the attention of His Majesty's inspectors of taxes with a view to securing uniformity of practice.
§ Sir H. NIELDWould the right hon. Gentleman be surprised to know that the question was prompted by one of the principal firms of chartered accountants in the City of London, who know their facts?
§ Mr. CHURCHILLI know that my right hon. and learned Friend is always strongly fortified by facts in any question which he puts in this House.