HC Deb 25 November 1941 vol 376 cc597-8
47. Sir R. Clarry

asked the Chancellor of the Exchequer whether he can give an estimate of the amount of unnecessary expenditure on advertising totally unprocurable products and products in restricted supply; and, as this expenditure is due to the existing excess profit legislation and is money which would otherwise be paid to the Government as Excess Profits Tax, will he consider revising this allowance, especially considering the wastage both of paper, labour and transport under existing conditions?

The Chancellor of the Exchequer (Sir Kingsley Wood)

Information with regard to the first part of my hon. Friend's Question is not available. As regards the second part of the Question. I would remind my hon. Friend that the E.P.T. law already contains a provision giving the Commissioners of Inland Revenue power, in computing profits for E.P.T. purposes, to disallow expenses in excess of the amount they consider reasonable and necessary, having regard to the requirements of the trade or business. Unreasonable or unnecessary expenditure on advertising, like any other unreasonable or unnecessary expenses, would be subject to challenge under this provision.

Sir R. Clarry

Will my right hon. Friend tell us what is the necessary expenditure in advertising for things which are unprocurable in any circumstances?

Sir K. Wood

That undoubtedly is a case which will have to be considered under the Section I have mentioned.

Mr. Higgs

Is the Chancellor aware that the Government publication known as "Agriculture" contains advertisements for goods that are unprocurable and that one-third of that publication is devoted to advertisements?

Sir K. Wood

No, Sir.