§ 50. Sir W. Davisonasked the Chancellor of the Exchequer whether he has now been able to look into the case, to which his attention has been drawn, where the Inland Revenue has been treating payments by the War Damage Commission in respect of stock destroyed by enemy action as a constructive sale, the profits of which are liable to Excess Profits Tax, notwithstanding the fact that the whole of such payments are required for the replacement of the stock destroyed; and what action it is proposed to take to deal with cases of this kind?
§ Sir K. WoodI have carefully considered the case to which my hon. Friend refers, and I regret I cannot see my way to propose any alteration of the law under which payments received in compensation for destroyed trading stocks, in common with insurance payments or payments that may be made for compulsory acquisition of trading stocks, fall to be included as trading receipts for the purpose of computation of trading profit.
§ Sir W. DavisonDoes not my right hon. Friend realise that the Treasury's interpretation of the law, in treating a payment by the War Damage Commission as a constructive sale, means the ruin of many old-established businesses? That was never intended to be the result of the Excess Profits Tax and, when the matter was discussed on 9th June, all parties, including the late Financial Secretary to the Treasury, urged that this inequity should not continue?
§ Sir K. WoodI could not assent to all that my hon. Friend has said. He has given me one case in which I regret that there are certain circumstances which make for a degree of hardship, but I do not think I could propose an alteration in the law.
§ Sir W. DavisonThat is only an example of many other cases, and, even if there is only one case, why should one man be unjustly treated?