HC Deb 24 May 1932 vol 266 cc289-90
Mr. STEVENSON

I beg to move, in page 12, line 7, at the end, to add the words: (2) Any relief given under Section thirty-three of the Finance Act, 1926, from an assessment shall be given in respect of a loss sustained in any year within the six years immediately preceding the years of assessment before it is given in respect of a loss sustained in any year not within those six years. The purpose of the Amendment is to remove an ambiguity which may arise as to the benefits conferred on a trader by the terms of Clause 17, and also to ensure that the trader shall have the maximum benefit intended to be conferred upon him by this Clause. To understand the situation, one has to remember that as the law stands at present, if a trader should incur a loss in one particular year, he is entitled to deduct that loss from any profits which may be made during the following six years. These profits, of course, are arrived at after making provision for depreciation. Clause 17, as I understand it, gives an additional benefit to the trader in the respect that it entitles him to a deduction or set-off of the additional amount which he would have been entitled to set off had no provision been made for depreciation before arriving at the profits. That additional deduction may be set off against profits during any subsequent year and is not confined to the six years following the date when the loss was made. Therefore, we have it that there are two separate rights which arise to the trader, and the object of the Amendment is that when a year arrives in which the profits are not sufficient to enable him to set off the losses made in the previous year, he is to be entitled to choose which of the losses he may set off against the profits and therefore, if he sees fit, carry forward the others to a subsequent year.

Major ELLIOT

As I understand it, two losses for different years might compete with wear and tear allowances against profits in the same year—a loss made more than six years ago, which, being a loss displaced by wear and tear, could be carried forward indefinitely, and a loss made six years ago which might lapse unless it could be allowed in the seventh year. It seems to me that the point is brought out in the Clause, but certainly I am willing to accept the Amendment. It does not change in any way the sense of the Clause, and I should be willing to accept it if my hon. Friend thinks it removes an ambiguity. I should be very glad to do anything to remove ambiguity from this Clause, which, I admit, is extremely stiff reading. We did in fact originally contemplate putting in some provision of this kind, but afterwards we decided that it would be unnecessary. If, however, my hon. Friend thinks it would remove ambiguity, and I understand it is supported by important bodies, I am willing to accept the Amendment.

Amendment agreed to.