HC Deb 25 June 1959 vol 607 cc1388-90
42. Mr. H. Wilson

asked the Chancellor of the Exchequer whether in view of doubts about the existing law in relation to the admissibility as tax-exempt expenditure of donations by business firms for purposes of political and other propaganda campaigns, he will introduce legislation to ensure that such donations are not admitted by the Board of Inland Revenue as admissible deductions in the computation of Income Tax and Profits Tax.

The Financial Secretary to the Treasury (Mr. J. E. S. Simon)

Expenditure by a trader is not allowable as a deduction for tax purposes unless it was incurred wholly and exclusively for the purposes of his trade. In these circumstances my right hon. Friend sees no reason for fresh legislation on the matter.

Mr. Wilson

Is the hon. and learned Gentleman aware that the Director of the Institute of Directors has fairly and honestly stated that donations to his campaign are not deductible for tax purposes, but the National Union of Manufacturers has stated that donations to its campaign are deductible for tax purposes? In view of this confusion, will the Chancellor or the hon. and learned Gentleman take steps to clarify the situation so that we know exactly where we are?

Mr. Simon

I do not think that there is any doubt as to what the law says in this matter or that it is fair and equitable. Different people may think that particular expenses fall one side or other of the line, but it is not for my right hon. Friend to disabuse them if they are under a misapprehension.

Mr. Wilson

Will not the hon. and learned Gentleman state clearly that the Chancellor will take steps to ensure that such donations are not admissible for tax exemption? Is he aware that there is very great concern about the matter in the country? Will he say whether the unwillingness of the Government to act either administratively or legislatively has anything to do with their conception of party advantage?

Mr. Simon

No, Sir. As I think I have told the House before, the position is that where there is any doubt the Inland Revenue inspector challenges the expenditure and leaves the taxpayer to make his case on appeal.

Mr. J. Griffiths

Is the political levy of the bosses' trade union collected by contracting in or contracting out?

Mr. Coldrick

Why should the law apply differently to the Co-operative movement compared with private trade? Every penny spent by the Co-operative movement in protecting itself against politicians is taxable, whereas when Messrs. Tate and Lyle and the steel companies proceed to use money to protect themselves, as they say, against the Labour Party, it is not subject to taxation. Why should there be this distinction?

Mr. Simon

I should like to answer the hon. Gentleman, but it would be quite wrong for me to do so. [HON. MEMBERS: "Why?"] It is a fundamental rule upon which the House has always insisted that a Minister shall not discuss the affairs of any individual taxpayer.

Mr. Wilson

Is the hon. and learned Gentleman aware that my Question does not refer to individual taxpayers? Is he also aware that I have here the campaign document from the National Union of Manufacturers? Appealing for subscriptions for its campaign, it says: Subscriptions to the National Union are allowed as a trade expense for taxation purposes. If I pass this document to the hon. and learned Gentleman, will he take steps to disabuse the National Union of Manufacturers about this somewhat fraudulent indication to the people to whom it is appealing?

Mr. Simon

I need hardly say that I will carefully consider any material which the right hon. Gentleman draws to my attention. Nevertheless, it is not the function of my right hon. Friend to correct every misapprehension that may exist in the minds of any particular publicist.

Mr. Wilson

Is it a misapprehension?

Mr. Simon

The right hon. Gentleman asks "Is it a misapprehension?" That is a matter for the law to state, not for me.