64. Sir F. HALLasked the Financial Secretary to the Treasury if he is aware that the claim of the Inland Revenue Department that expenses incurred by trade associations on appeals against the removal of Safeguarding Duties or on applications under the Merchandise Marks Act should be subject to Income Tax has been unanimously disallowed by the City of London Commissioners for Income Tax; and, seeing that this claim was pressed by the Government after consideration of representations made to them by deputations from the National Union of Manufacturers and others, whether he will state if the Government propose to carry the matter further or whether the decision in the case of the City of London will be accepted for the rest of the country?
§ 65. Colonel GRETTONasked the Financial Secretary to the Treasury if his attention has been called to the decision of the General Commissioners of Inland Revenue for the City of London allowing the appeal of the National Union of Manufacturers against the refusal of the Board of Inland Revenue to allow deduction from the Income Tax returns of companies and business firms of expenditure incurred by them in connection with applications under the Safeguarding of Industries Rules and the Merchandise Marks Act, 1926; and whether, in view of this decision and of similar previous decisions, he will give instructions to withdraw such claims for Income Tax and also for the refund of any Income Tax already paid on such expenditure?
§ Mr. PETHICK-LAWRENCEI am aware of the decision to which these questions refer. That decision, which related to a trade association, is in direct conflict with an earlier decision of another eminent body of Commissioners. For technical reasons, the Board of Inland Revenue are precluded from carrying the recent appeal to the courts, but they propose, when a suitable opportunity presents itself, to seek the guidance of the courts in the matter. In the meantime, they will acquiesce in the allowance for Income Tax purposes of expenditure of this kind incurred by trade associations. There can, of course, be no question of reopening assessments which have become final and conclusive or of making any repayment of tax in such cases.