HC Deb 03 August 1965 vol 717 c1260
22. Mr. Barnett

asked the Chancellor of the Exchequer if he will give an estimate of the number of limited companies which he anticipates will not pay Corporation Tax; and, assuming a rate of 40 per cent., how many he estimates will pay less than £1,000 in the first year.

Mr. MacDermot

In round numbers, of the 480,000 limited companies on the Board of Trade register, 150,000 will, it is estimated, pay no Corporation Tax and a further 250,000 would be unlikely to be liable for more than £1,000 for the first full year if the rate were fixed at 40 per cent.

Mr. Barnett

Would not my hon. and learned Friend agree that this is an indication of the exaggeration made by Conservative spokesmen throughout the course of the Finance Bill? Would he not agree that this indicates that the Corporation Tax gives every possible tax incentive to far and away the majority of companies, particularly those which plough back their profits for further growth?

Mr. MacDermot

Yes, I fully agree. The figure of 150,000 companies which are unlikely to pay tax not only includes the many companies which either have ceased to carry on business or have not yet started to do so, but also companies whose profits before depreciation are less than the capital allowances that are due.