§ 49 and 50. Mr. J. P. MORRISasked the Chancellor of the Exchequer if he will furnish the number of private limited companies in existence in 1928, 1929, 1930, and 1931; the number in each year which have been challenged for assessment of Sur-tax by the Board of Inland Revenue under Clause 31 of the Finance Act of 1927; the number of cases in each year where a claim for payment of Sur-tax has been made; and the number of claims actually paid in each year; (2) if he is aware that the Inland Revenue authorities, under Section 21 of the Finance Act of 1922, as amended by Section 31 of the Finance Act of 1927, are assessing to Surtax the whole of the profits made by bona fide private companies engaged in manufacturing industries; and if he will consider amending the law so as to exempt from assessment to Sur-tax all such companies which have distributed a minimum 50 per cent. of their profits or, alterna- 665 tively, so as to define the words—a reasonable part of its actual income from all sources?
Mr. CHAMBERLAINAs the answer is somewhat long and contains a number of figures, I will circulate it in the OFFICIAL REPORT.
| — | 1928. | 1929. | 1930. | 1931. |
| (1) Number of companies which have been asked for particulars under paragraph 4 of the 1st Schedule of the Finance Act, 1922. | 408 | 574 | 449 | 373 |
| (2) Number of companies in connection with which a claim for payment of Sur-tax (or Super Tax) has been made. | 70 | 99 | 186 | 153 |
| (3) Number in which tax has actually been paid | 66 | 90 | 167 | 144 |
§ It will be seen from the foregoing figures that in a very small proportion only of the total number of companies within the scope of the provisions in question has any action at all been taken and, further, that a claim for Sur-tax (or Super-tax) has been made in a still smaller proportion.
§ Companies engaged in manufacturing industries are not, as such, excepted from the statutory provisions, but I would point out that, in determining whether or not there are grounds for taking action in a particular case, the law requires that regard should be had not only to the current requirements of the company's business but also to such other requirements as may be necessary or advisable for the maintenance and development of the business. The question whether or not in a particular case there has been a reasonable distribution of income is one which can only be determined by reference to the facts and circumstances of that case. A percentage of income which would constitute a reasonable distribution in the circumstances of one case might obviously be quite unreasonable in the circumstances of another and accordingly, even if it were possible to define satisfactorily the class of companies which I think my hon. Friend has in mind, I could not accept either of the suggestions which he has put forward. I would remind him that any company which is aggrieved by any direction given under the provisions in question may appeal to the Special Commissioners of Income Tax, and if dis-
666§ Following is the answer:
§ The number of companies to which the provisions of Section 21 of the Finance Act, 1922, as amended by Section 31 of the Finance Act, 1927, apply is estimated to be in the neighbourhood of 100,000.
§ The following figures relate to the cases in which action has been taken.
§ satisfied with their decision may require the appeal to be reheard by the Board of Referees, a tribunal of business men presided over by an eminent lawyer. It has also the right to appeal to the High Court on a, point of law.
§ 55. Mr. LOGANasked the Financial Secretary to the Treasury the total number of taxpayers on 1st April, 1931, and 1st April, 1932, respectively, together with the estimated amount of extra revenue obtained during the past financial year in consequence of the exemption limit for Income Tax on certain incomes being lowered in the Budget of 1931?
§ Major ELLIOTAs regards numbers, the hon. Member will find in table 48 of the recently published 74th Annual Report of the Commissioners of Income Tax estimates of the numbers of Income Tax payers far the year 1930–31. Final estimates of the increase in numbers for the year 1931–32 consequent on the change in graduation effected by the Second Finance Act of last year cannot yet be given but I might refer the hon. Member to the provisional estimates which were given in a reply to a question on the 17th September last of which I am sending him a copy. I am not yet in a position to state how much extra revenue was raised last year in consequence of the lowering of the exemption limit.