§ 11. Mr. E. Fletcherasked the Chancellor of the Exchequer what estimate was given by the Board of Inland Revenue in its Memorandum 47 to the Royal Commission on the Taxation of Profits and Income as to the United Kingdom tax now payable by United Kingdom concerns operating mainly abroad, excluding insurance and shipping, after allowing for double taxation relief; and whether he has any later estimate.
§ Mr. PowellThe estimate given to the Royal Commission was £130 million based on profits at their 1951 level and taxation at the rates for 1952–53. The provisional estimate for 1956–57 is about £35 million,
§ Mr. Gordon WalkerIn view of the vagueness of the Chancellor in his Budget speech about the estimate of the cost, which, so he said, would be something over £35 million next year—he did not even say in a full year—has he now been able to form any better and closer estimate of the cost of this change?
§ Mr. PowellThe figures which I have given are entirely in line with those given by my right hon. Friend.
§ Mr. FletcherDid I understand the hon. Gentleman to say the comparable figures were £130 million and £35 million?
§ Mr. PowellYes. This difference measures the reduction in profits since 1951 and also the reduction of taxation.
§ 12. Mr. E. Fletcherasked the Chancellor of the Exchequer what estimate was given by the Board of Inland Revenue to the Royal Commission on the Taxation of Profits and Income as to the revenue that would be lost to the Exchequer if the profits of companies trading overseas were to he taxed only on remittances.
§ Mr. PowellThe loss of revenue was estimated at £90 million on the basis of the 1951 level of profits and distributions and 1952–53 levels of taxation.
§ 13. Mr. E. Fletcherasked the Chancellor of the Exchequer how much revenue has been lost in the estimate of the Board of Inland Revenue by the failure to adopt the recommendations contained in paragraphs. 30 to 40 of the Report of the Royal Commission on Income Tax, 1920, with regard to the distinction between active control and complete potential control of United Kingdom companies trading overseas.
§ Mr. PowellI regret that the information which would enable such an estimate to be made is not available.
§ Mr. FletcherWould the Financial Secretary take steps to try to have it available before we consider Part IV of the Finance Bill?
§ Mr. PowellI am afraid that it would be very difficult to obtain information about the profits which non-resident companies do not remit to this country.