CLAUSE 61.—(Certain expenses not to be a deduction for income tax, national defence contribution or excess profits tax.) (Hansard, 12 February 1941)

§ Sir Frank Sanderson (Ealing)
I beg to move, in page 44, line 21, to leave out from the beginning to the first "the," in line 23, and to insert: It is hereby provided that the amount paid by a contributory property shall he deducted from the annual value in computing the liability under this Act of any person for any purpose of the Income Tax Acts, but not so as to include. I believe the Amendment is self-expressive and I do not want to develop the argument for it very far. I desire that the premium for this insurance should be regarded as business expenditure. I do not see how the premium differs from any other form of insurance premium, say upon workmen's compensation or upon premises, which are regarded as business expenditure. I would ask my right hon. and gallant Friend whether he can see his way to allow this premium to be so regarded?

§ Captain Crookshank
I note that the intention of the Amendment of my hon. Friend is that the premium should be regarded as business expenses. The Amendment, as it appears on the Paper, would authorise a deduction in the instalment under Part I of the Bill in assessing Income Tax on property under Schedule A. I do not think that is what the hon. Member had in mind but, anyhow, it is out of the question.

§ Sir F. Sanderson
The Amendment is of my own drafting, and if the principle were agreed to, it would no doubt be redrafted by my right hon. and gallant Friend.

§ Captain Crookshank
It would not only have to be redrafted. It would have to be something different. One could not undertake the reassessment of all Schedule A payments. When the general proposition was raised by my hon. Friend and several other hon. Gentlemen on the Second Reading Debate, my right hon. Friend the Chancellor of the Exchequer, 1414 and the Solicitor-General, both pointed out that, in the view of the Government, it would be wrong to make this alteration. The reasons were very well put by my right hon. and learned Friend. What we require from this is new money. If you allow this premium as an expense, it means that you have to get more money from the taxpayers, or else—and this would be just as disadvantageous to the people concerned—to raise the rate of premium. You have to get more money from somewhere and, on the whole, the Government came to the conclusion that this form of premium should he dealt with as suggested by the Bill in its present form.
There is, of course, the further consideration which I am sure will be in the minds of hon. Members, that if we did allow it as a business deduction, we should come up against the difficulty which we have met elsewhere as to whether a particular firm is or is not paying Excess Profits Tax. According to their position, it would have to be considered how far the premium would be paid at the expense of the Government. Representations were received during the preparation of the Bill from various quarters, and these points were made by, I think, the Chambers of Commerce. On further consideration, they saw that this was not a point which could be maintained and that the Amendment should not be pressed. If one follows the matter out at length, one sees that the position which the Government have taken up is the best. I am sorry that I cannot accept the suggestion on which my hon. Friend's Amendment is based.