§ Notwithstanding anything in Rule 3 of the Rules applicable to Cases I and II of Schedule D, when, after the first day of April, nineteen hundred and forty-four, a person carrying on a trade pays any sum for the registration of a trademark in any part of the British Empire outside the United Kingdom or in any foreign country, the sum paid may be deducted as an expense in computing the profits or gains of 734 the trade for the purposes of income tax.—[Mr. Lewis.]
§ Brought up, and read the First time.
§ Mr. Lewis (Colchester)I beg to move, "That the Clause be read a Second time."
The Chancellor of the Exchequer has, on several occasions, told us how sympathetic he feels to any proposals calculated to extend our export trade after the war, and it is with that object in view, that this proposal has been put forward. Hon. Members will appreciate that this question of the cost of the registration of trademarks for overseas markets may be, to a big established corporation, a very small matter, and it it were merely urged in their interests, I think the case would be 'bound to fail. But the position is not the same in the case of small firms. On that, I would like to say that if we desire to extend our exports after the war, I think we should be very foolish to rely entirely on trying to sell those things we have sold before. We should try, on the contrary, to discover new products which we can sell abroad, and, in order to do that we should encourage enterprising people to start businesses with the idea of selling new products abroad. To such a small firm charges of this kind are a serious consideration. I understand that to cover available markets abroad and in the Colonies might cost as much as £1,000 which, to people struggling to establish a business, is a substantial item. I suggest to my right hon. Friend that in the public interest, it might be desirable to allow this charge to be offset against Income Tax in the event of profits being earned. It may be that, for some reason, my right hon. Friend will not desire to add this Clause to the Bill at this stage. I would be satisfied if he would undertake seriously to consider the matter. I know that when the present Chancellor says he will consider a thing, he can be relied upon to do so. If I can have an assurance in that sense I shall be satisfied.
§ Sir Harold Webbe (Westminster, Abbey)I beg to second the Motion.
§ Mr. AsshetonWithout going into the merits of the case which my hon. Friend has been putting, I can give him the assurance for which he asks. This problem is one of many which my right hon. Friend the Chancellor is to con- 735 sider in connection with questions relating to post-war taxation. In those circumstances, I am quite sure he will be good enough to withdraw his proposed Clause.
§ Mr. Hammersley (Willesden, East)I wonder whether my right hon. Friend could give us a little further explanation. I was rather surprised to see this new Clause on the Order Paper, as I was always under the impression that expenditure of this kind, which is necessary for the conduct of a business, was, in fact, allowed as a trading expense. Certainly in some businesses the registration of trademarks abroad is absolutely necessary. One of the great disadvantages under which the Lancashire cotton trade laboured in the past was that their trademarks were so frequently copied by Japan. Is it to be said that those cotton merchants, who produce special lines and have trademarks under which these special lines are sold, are not to regard registration of those particular lines as a legitimate trading expense? The position is obscure and if, in fact, the registration of a trademark abroad is essential for the carrying on of the business, is it not a legitimate trading expense?
§ Mr. AsshetonIf, with permission, I may be allowed to answer my hon. Friend, a great deal is admissible as a deduction against trading profits for taxation purposes. The registration of a trademark constitutes the acquisition of a capital asset, however, and is part of the general question which my right hon. Friend has undertaken to consider.
§ Mr. Hammersley rose——
§ Mr. SpeakerThe hon. Member has exhausted his right to speak.
§ Motion and Clause, by leave, withdrawn.