HC Deb 03 February 1942 vol 377 c1047
50. Mr. Hammersley

asked the Chancellor of the Exchequer whether he will consider the advisability of disallowing, for Income Tax purposes, expenditure on advertising which exceeds a reasonable proportion of the expenditure for advertising in the standard years?

Sir K. Wood

Under the existing law, the allowance or disallowance of expenditure on advertising as a deduction in computing the profits of a business for Income Tax purposes is determined by the same rules that apply to other items of expenditure, and I see no reason for introducing any differential treatment.

Mr. Hammersley

Does my right hon. Friend's answer mean that what is stated in the Question is, in fact, the existing procedure?

Mr. Hopkinson

Does not the whole of this expenditure come direct out of money which would otherwise go to more useful purposes?

Sir K. Wood

My hon. Friends will remember that I took power in the last Finance Act to deal with this and other matters, but if facts are brought to my notice, I will look into them.

Mr. G. Strauss

In view of the fact that the present position is a public scandal, could not the right hon. Gentleman disallow advertisements of all goods which cannot be sold?

Mr. Hammersley

Does not the reply of my right hon. Friend mean that unless some outside individual brings cases to the attention of the Revenue, nothing will be done?

Sir K. Wood

No, Sir. All I did was to invite my hon. Friends to give me information.