§ 50. Mr. Hammersleyasked 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. WoodUnder 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. HammersleyDoes my right hon. Friend's answer mean that what is stated in the Question is, in fact, the existing procedure?
§ Mr. HopkinsonDoes not the whole of this expenditure come direct out of money which would otherwise go to more useful purposes?
§ Sir K. WoodMy 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. StraussIn 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. HammersleyDoes 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. WoodNo, Sir. All I did was to invite my hon. Friends to give me information.