§ 52. Mr. Norman Bower
asked the Chancellor of the Exchequer whether his attention has been drawn to the action of Carreras, Limited, in giving their employees six weeks' wages as a Christmas bonus; whether such a bonus is chargeable against Excess Profits Tax; and whether, in view of the desire expressed from time to time that companies should limit their dividends to the pre-war figure in order to avoid any tendency towards inflation, he will emphasise the undesirability of paying bonuses in the form of wages on similar grounds?
§ Sir J. Anderson
I cannot furnish information regarding the liability to tax of a particular taxpayer and am not, therefore, in a position to say how the particular bonus to which my hon. Friend refers would be treated for the purposes of the Excess Profits Tax. I can only say that the law contains special provisions in Section 32 of the Finance Act, 1940, regarding the allowance for Excess Profits Tax purposes of payments in respect of services and the application of these provisions in any particular case is a matter to be determined by the assessing and appeal authorities by reference to the circumstances of the case. In reply to the last part of the Question, I doubt if any useful general comparison can be drawn with the policy of limiting dividends, and I think the matter can safely be left to the judgment of those concerned.
§ Sir Percy Harris
Is not a firm to be encouraged to treat its employees generously, especially at Christmas time, even though it be in war-time?
§ Mr. Craven-Ellis
Would it be in Order for the right hon. Gentleman to suggest to this company that they issue Savings Certificates instead of issuing money wages?
§ Mr. Rhys Davies
Is the right hon. Gentleman not aware that all good employers 1394 in the country do give a bonus at Christmas time?