§ 25. Mr. McKayasked the Chancellor of the Exchequer how much profits were reduced for the year 1956–57 due to the contributions paid by employers, under the National Insurance Acts; what was the approximate total loss of revenue to the Exchequer in Income Tax, distributed Profits Tax, undistributed Profits Tax, and Income Tax on dividends; and what were the full contributions paid by employers.
§ The Financial Secretary to the Treasury (Mr. J. Enoch Powell)I would refer the hon. Member to the Written Answer which I gave him on 5th December.
§ Mr. McKayThat Written Answer says that the amount would be £95 million. Can the hon. Member explain the apparent discrepancy of £89 million paid in contributions by the other employers? Is it not correct that the amount indicated in that Written Answer assumes that the money is applied to undistributed profits? Would not the sum be much larger if it were applied to dividends?
§ Mr. PowellThe difference between the total and the £215 million is the amount of the contributions paid by employers who are not traders, such as public authorities. The figure of £95 1412 million which I gave covered the entire tax effect of these allowances on all forms of taxation.