HC Deb 12 June 1956 vol 554 cc225-6
28. Mr. Marquand

asked the Chancellor of the Exchequer what change of practice there has been in the treatment of one-man companies with regard to Surtax direction since the statement of practice made by the then Chancellor of the Exchequer on 22nd July, 1948.

Mr. H. Macmillan

There have been no changes in the general practice to which the right hon. Gentleman refers.

Mr. Marquand

Does the Chancellor not think that, after all these years have elapsed, it would be a good thing to review this practice, especially the exemption from direction for Surtax of those companies which made no dividend distribution before 1947?

Mr. Macmillan

Of course, all these matters are kept in review, but the practice has, so far as I know, worked satisfactorily since it was first laid down by the Chancellor in that year, 1948.

Mr. Marquand

While it has no doubt worked satisfactorily and no wrong practices have been taking place, is it not very surprising that no payment whatsoever of dividend should be regarded as a reasonable practice, after all this length of time?

Mr. Macmillan

There are very varied considerations in that. The practice is carried out by the Special Commissioners in accordance with that arrangement which was made. So far as I know, there has been no accusation that there has been any malpractice under it.

29. Mr. Marquand

asked the Chancellor of the Exchequer whether one-man companies formed or registered after 22nd July, 1948, are treated in the same way as similar companies existing before that date, when the provisions of Section 21 of the Finance Act, 1922, or Section 245 of the Income Tax Act, 1952, are applied.

Mr. H. Macmillan

I would refer the right hon. Gentleman to the reply which I gave to my hon. Friend the Member for the Cities of London and Westminster (Sir H. Webbe) on 25th April last, of which I am sending him a copy.

Mr. Marquand

While thanking the right hon. Gentleman for sending me a copy of that reply, which I have not seen, may I ask whether he appreciates that there is a feeling among small businessmen who are trying to plough back their profits for the expansion of their businesses that there is some discrimination against companies formed since 1947, and that those formed before 1947 do, after all these years, have an unfair advantage?

Mr. Macmillan

This is a highly complicated question of tax procedure. If the right hon. Gentleman would be good enough to have a talk with me about it, I should be very happy to hear his views.