§ 66. Sir HERBERT SAMUELasked the Chancellor of the Exchequer whether the amounts payable by local authorities in respect of Income Tax on annual sums granted by the Unemployment Grants Committee in assistance of revenue-producing undertakings will consist solely of sums which will have been deducted by the local authorities from payments made by them to stockholders or other lenders?
§ Mr. P. SNOWDENThis will be so in most cases, for these grants are generally made in aid of interest on loans. But it will not be so where the grant is made for other purposes, as for instance in aid of wages or interest paid to a bank. In such cases the expenditure met out of the grant cannot properly be regarded as having been defrayed out of the funds of the under- 1342 taking, and therefore cannot be allowed as a deduction in the computation of profits.