HC Deb 22 May 1952 vol 501 cc777-80
Mr. Boyd-Carpenter

I beg to move, in page 38, line 34, to leave out subsection (1), and to insert:

  1. (1) Subject to the provisions of subsection (2) of this section, where the trade or business of a body corporate commenced after the first day of January, nineteen hundred and forty-seven, its standard profits for a full year shall be calculated under subsection (3) of this section.
  2. (2) Where the trade or business of a body corporate commenced after the first day of January, nineteen hundred and forty-seven, then—
  1. (a) if its trade or business commenced before the first day of January, nineteen hundred and forty-eight, the body -corporate may elect either that its standard profits for a full year shall be calculated under subsection (4) of this section or that they shall be calculated under subsection (5) of this section;
  2. (b) if its trade or business commenced on or after the first day of January, nineteen hundred and forty-eight but before the first day of January, nineteen hundred and forty-nine, the body corporate may elect that its standard profits for a full year shall be calculated under subsection (5) of this section;
  3. (c) if the condition specified in the proviso to subsection (5) of the last preceding section is fulfilled in its case and its trade or business commenced before the first day of January, nineteen hundred and fifty, the body corporate may elect that its standard profits for a full year shall be calculated under subsection (6) of this section.
This Amendment, Sir Austin, and the eight subsequent Government Amendments are part of a batch which apply to the new business—that is to say, the business started after the beginning of the standard period—the various changes which were applied to the old business by the Amendments to Clause 33.

I hope it will be for the convenience of the Committee if, just as on Clause 33 we took together the 16 Amendments concerned, we take these nine Amendments together.

The Temporary Chairman (Sir Austin Hudson)

That will be convenient to the Chair.

Mr. Boyd-Carpenter

Then I need not detain the Committee very long. As I have said, the essence of these Amendments is to apply, with the necessary consequential administrative variations, the changes which my right hon. Friend the Chancellor announced when on Tuesday night he spoke on the Motion that Clause 31 stand part of the Bill.

The Committee has had a full discussion of those changes as they apply to the pre-1947 business on the series of Government Amendments to Clause 33. These Amendments have in substance the same effect. There are necessary variations, such, for example, as the variation in respect of the time by which a business must have been started in order to be allowed to go on a profits standard, but they are simply the application of the same principles as the Committee accepted in Clause 33.

Sir F. Soskice

So far as we can see, studying the complicated Amendments on the Order Paper, they effect precisely what the Financial Secretary has indicated. They reflect, in terms of Clause 34, in relation to companies which began business after the standard period, the changes which were introduced in Clause 33 in relation to companies which began their business before that period It seems to us that the Clause does no more and no less than that, and because it does so, there is no opposition we can offer to it, having accepted Amendments to the previous Clause.

Amendment agreed to.

Further Amendments made: In page 39, line 1, leave out "subsection," and insert "Act."

In line 1, leave out "ten," and insert "twelve."

In line 22, leave out from "business," to second "and," in line 23.—[Mr. Boyd-Carpenter.]

Mr. Boyd-Carpenter

I beg to move: in page 39, line 26, to leave out "ten per cent. of."

Mr. Roy Jenkins

May I ask the Financial Secretary a question? I may have misread the Amendment, but at a quick reading it seems to have the effect of leaving out "10 per cent." regarding undistributed profits and of not inserting "12 per cent." It appears, therefore, that the whole of the undistributed profits would go to increase the tax.

Mr. Boyd-Carpenter

The effect of the Amendment, when read with the others of the series of Amendments, is to make the variation from 10 to 12 per cent., as in the previous Clause.

Mr. Jenkins

Where is the 12 per cent. that is to be inserted?

Mr. Boyd-Carpenter

I am sorry not to be able to give the hon. Gentleman the answer immediately, but I am advised that that is the effect, as his right hon. Friend the Member for Leeds, South (Mr. Gaitskell), who in his time has had the same loyal assistance at the Box as I am able to take advantage of, no doubt knows perfectly well. I am very much obliged to the hon. Gentleman for raising this point, for I am now advised that the Amendment is designed to correct an additional drafting mistake.

Amendment agreed to.

Further Amendments made: In page 39, line 27, leave out "ten per cent. of."

In line 30, leave out subsection (3), and insert: (4) Where a body corporate's standard profits for a full year fall to be calculated under this subsection they shall be the sum arrived at—

  1. (a) by taking an amount equal to half its profits for the standard years; and
  2. (b) by applying the provisions of subsections (2) and (3) of the last preceding section as if that amount were the amount arrived at under subsection (1) thereof;
and the standard years shall be the year beginning with the commencement of its trade or business and the subsequent year: Provided that the said subsection (3) shall have effect as if the reference to the relevant date as defined in subsection (6) of that section were a reference to the relevant date as defined in subsection (7) of this section. (5) Where a body corporate's standard profits for a full year fall to be calculated under this subsection, they shall be the sum arrived at—
  1. (a) by ascertaining its profits for the standard years; and
  2. (b) by reducing those profits so that they bear to the full amount thereof the same proportion as one year bears to two years 780 less so much, if any, of the first of the standard years as preceded the commencement of its trade or business; and
  3. (c) by applying the provisions of subsections (2) and (3) of the preceding section to the result as if it were the amount arrived at under subsection (1) thereof;
and the standard years shall be the years nineteen hundred and forty-eight and nineteen hundred and forty-nine: Provided that where the body corporate's trade or business commenced after the beginning of the first standard year, subsections (2) and (3) of the said section thirty-three shall have effect as if—
  1. (i) in the said subsection (2) the reference to the beginning of the first of the standard years were a reference to the commencement of the body corporate's trade or business and the reference to two years were a reference to two years less so much of the first of the standard years as preceded the commencement of the body corporate's trade or business and
  2. (ii) in the said subsection (3), the reference to the relevant date as defined in subsection (6) of that section were a reference to the relevant date as defined in subsection (7) of this section.
 (6) Where a body corporate's standard profits for a full year fall to be calculated under this subsection they shall be calculated as under the last preceding subsection except that the standard years shall be the years nineteen hundred and forty-nine and nineteen hundred and fifty. (7) The relevant date referred to in subsection (3) of the last preceding section, as modified by subsections (4) to (6) of this section, is—
  1. (a) where the body corporate's standard profits for a full year fall to be calculated under subsection (4) of this section, the date falling six months after the date of the commencement of its trade or business;
  2. (b) where the body corporate's standard profits for a full year fall to be calculated under subsection (5) of this section, the first day of July, nineteen hundred and forty-eight or the date of the commencement of its trade or business, whichever is the later;
  3. (c) where the body corporate's standard profits for a full year fall to be calculated under subsection (6) of this section, the first day of July, nineteen hundred and forty-nine or the date of the commencement of its trade or business, whichever is the later.

In page 40, line 9, leave out "ten," and insert "twelve."

In line 9, leave out "twelve," and insert "fourteen."—[Mr. Boyd-Carpenter.]

Clause, as amended, ordered to stand part of the Bill.