HC Deb 17 March 1964 vol 691 cc1172-4
19. Mr. O'Malley

asked the Chancellor of the Exchequer if he will name the companies concerned in the recent report of the Comptroller and Auditor General that certain parent companies have been able to claim repayment of £12 million Income Tax in respect of dividends received from subsidiary companies although tax was never paid in the first place.

Mr. Boyd-Carpenter

It is the longstanding practice not to disclose the tax affairs of particular taxpayers.

Mr. O'Malley

Since this is an abuse of the intention of existing tax laws, and since it is at least possible that some of the amounts mentioned will not be recoverable by the taxpayer, may I ask why the Government do not act in this matter? Is it true that a large steel firm is involved in these transactions? Are the Government, with taxpayers' money, subsidising firms which are prominently supporting Tory propaganda?

Mr. Boyd-Carpenter

That does not arise out of the Question which asks me to break a long-standing Inland Revenue rule. The question of the merits of the matter seems to arise on the next Question.

20. Mr. Milan

asked the Chancellor of the Exchequer if he will estimate the amount of tax which will be payable in the current year to parent companies in respect of dividends received from subsidiary companies, although such tax will not in fact have been paid in the first place.

Mr. Boyd-Carpenter

No, Sir.

Mr. Millan

But why not? Will not this amount increase because of the increasingly beneficial capital allowances? Is not the present situation wide open to abuse by groups of companies, and is it not a fact that some of this tax will not be recovered and that even when it is recovered the tax repayments will at least have been given as interest-free loans from the Revenue to these companies? Why do not the Government do something about it? It is not terribly difficult to avoid this abuse.

Mr. Boyd-Carpenter

The hon. Member is quite right, but this is a situation which in some measure, at any rate, derives from the big increases in capital allowances which, with the general assent of the House, have been made in recent years. The matter is raised in a Report by the Comptroller and Auditor General to the Public Accounts Committee. We shall certainly study the Public Accounts Committee's Report when it makes it. The Question itself asks for the figures. This would involve going into the whole intricate series of tax repayments of companies which have subsidiary companies and would involve an inordinate amount of labour.

Mr. Houghton

Is not this matter relevant to the general question of the level of the taxation of company profits? Has the right hon. Gentleman studied the information in the Gordon Richardson Report in this context? Can he assure the House that his right hon. Friend the Chancellor of the Exchequer will have something to say about this in his Budget statement?

Mr. Boyd-Carpenter

The hon. Member is directly and explicitly invit- ing me to anticipate my right hon. Friend's Budget statement. That, of course, I will not do.