§ 50 Mr. J. P. MORRISasked the Chancellor of the Exchequer (1) if he is aware that a large number of New York Stock Exchange firms have opened branches in London for the purpose of collecting and transmitting orders to New York, and that the commissions earned on such orders are retained in New York; and what action does he propose to take to ensure that British Income Tax is paid on such commissions;
1814 (2) if he is aware that, previous to the establishment of branch offices in London of New York Stock Exchange firms, all orders for American stocks and shares emanating from this country were in the main handled by members of the London Stock Exchange; that on the commissions earned on such orders Income Tax and Surtax was paid to the British Treasury; that the system now in operation whereby the said branch offices are not credited with any commissions so earned but debited with all the expenses incurred deprives the British Treasury of a large source of revenue; and what action he proposes to take in the matter;
(3) if he is aware that London branch offices of New York Stock Exchange firms collecting and transmitting orders to New York are in a better competitive position than London Stock Exchange firms, owing to the incidence of Income Tax and Surtax being heavier in this country than in the United States of America; and what action does he propose to take to ensure that English Stock Exchange firms are placed on an equal competitive basis with American firms operating in this country?
Mr. CHAMBERLAINI understand that the commissions to which my hon. Friend refers arise from services rendered outside the United Kingdom by certain concerns which, though they have branches in this country, are not resident in the United Kingdom. To levy United Kingdom Income Tax on such commissions would be inconsistent with the general principle of the Income Tax Acts, under which a non-resident person is liable in respect of trading or professional profits only in so far as those profits arise from the carrying on of the trade or profession within the United Kingdom. I may add that any commissions arising from services rendered within the United Kingdom are chargeable in the ordinary course, and that, in computing the profits from such sources, no deduction is allowable in respect of expenses relating to services rendered elsewhere.
§ 53. Mr. SUTCLIFFEasked the Chancellor of the Exchequer whether, with regard to the re-registration of trade marks, he will state under what statutory authority the Income Tax authorities are now claiming that renewal charges should be written back for the computation of Income 1815 Tax; and whether he is aware of the burden which this procedure imposes on firms for the first time?
Mr. CHAMBERLAINThe Board of Inland Revenue have recently had this matter under consideration and, while they are advised that the question at issue is not wholly free from doubt, they have decided, for the future, to offer no objection to the allowance of these charges.