§ 71. Sir ALFRED KNOXasked the Chancellor of the Exchequer if he will publish the figures on which the calculation was based that the yield of Income Tax, if applied to co-operative societies, will only amount to £350,000?
§ Mr. PETHICK-LAWRENCEYes, Sir. I will circulate particulars of the computation in the OFFICIAL REPORT.
§ Mr. MACQUISTENIs it not the fact that £350,000 is three times the figure which he, the Chancellor of the Exchequer, is taking off the pre-1916 insurances?
Following are the particulars:The following computation shows the additional Income Tax that would be payable by the co-operative societies if the law were altered so as to make the surplus on mutual 1129 trading a profit for Income Tax purposes and to render the societies liable to Income Tax on the net surplus remaining in their hands. The computation is based on the trading results of the year 1928. The interest on share capital and bonus to employés which are deducted from the surplus in the computation are chargeable to Income Tax under the existing law in the hands of the recipients if liable to tax; the dividends on purchases are trade discounts and as such are not liable to tax.
| All Co-operative Trading Societies. | ||
| £ | £ | |
| Surplus on trading for year 1928 | 27,500,000 | |
| Less: | ||
| Dividends on Purchases | 20,800,000 | |
| Interest on share Capital | 4,650,000 | |
| Bonus to Employés | 150,000 | 25,600,000 |
| Net surplus on trading | 1,900,000 | |
| Add back: | ||
| Excess of amounts written off for depreciation over amount estimated to be allowable for Income Tax purposes | 1,500,000 | |
| Income Tax (Schedules A & B) already paid by Societies and deducted in arriving at surplus | 410,000 | 1,910,000 |
| Total | 3,810,000 | |
| Tax thereon at 4s. in the £ | 762,000 | |
| Less tax already paid | 410,000 | |
| Additional tax that would be payable | 352,000 |