§ 56. Mr. Woodburnasked the Chancellor. of the Exchequer whether his attention has been drawn to the accounts of the Brush Electrical Engineering Company, Limited, published in "The Accountant" of 12th June, of which a copy has been sent to him with special reference to the item in the profit and loss account, compensation paid to a former director £8,039: whether this amount was paid free of tax; whether this amount has been allowed as an expense in calculating Excess Profits Tax; and whether he proposes to take any action to prevent large compensations to directors which involve the Treasury in the loss of revenue?
§ Sir K. WoodI am afraid that I cannot supply my hon. Friend with information regarding the affairs of particular 1934 taxpayers since, as he will be aware, the law requires all persons engaged in the assessment of the Income Tax and the Excess Profits Tax to take an oath of secrecy in relation to the assessment. With regard to the last part of my hon. Friend's Question which is of general application, Section 32 of the Finance Act, 1940, provides for the disallowance as a deduction for Excess Profits Tax purposes, of any expense in excess of the amount which is reasonable and necessary.
§ Mr. WoodburnIs the right hon. Gentleman aware that it is understood that such payments are free from Income Tax, and is he not entitled to take steps to see that changes which are not made in the interest of the war, and which may be made for purposes of nepotism are not exempted from tax?
§ Sir K. WoodI should like to study that before replying.
§ Mr. StokesIs it not a fact that the person referred to in the Question is now in the service of the Ministry of Supply, and has been for some time, and is the Chancellor aware that, £8,000 tax free represents a gross income of about £120,000?
§ Sir K. WoodNo, I have not all the information which the hon. Member has.
§ Mr. StokesDoes he not realise that this gentleman will be better off than the right hon. Member for Chelsea (Sir S. Hoare)?