§ 8. Mr. St. John-Stevasasked the Chancellor of the Exchequer whether he will take steps to remove present restrictions on the expenses and fees of directors of family companies which may be claimed before the levy of Corporation Tax.
§ Mr. DiamondNo, Sir.
§ Mr. St. John-StevasAre not the present limits of £13,000 a year, 1.5 per cent. of the profits that may be charged before tax, grossly discriminatory against the medium and larger sized family companies which are making such a great 1098 contribution to our industrial welfare? Will he not revise these limits upwards?
§ Mr. DiamondNo, Sir. I do not recognise any such discrimination. This broadly follows the pattern of previous taxation under Profits Tax. The limits were fully debated during the last Finance Act, and I do not see any reason to suggest their increase.
§ Mr. BarnettIs my right hon. Friend aware that the Opposition are grossly exaggerating, mischievously exaggerating, the effect of Corporation Tax on close public companies of this type?
§ Mr. DiamondI am certainly aware of that. I am sorry to have to observe that it is extremely difficult to try to get over—and I shall be greatly helped if hon. Members would assist me to get this over—that there are no penal provisions whatever in the Corporation Tax for close companies. The situation is ameliorated, not worsened, as compared with Profits Tax.
§ Mrs. ThatcherWill the right hon. Gentleman confirm that he has received a large number of representations from both professional and industrial bodies showing that this tax is inequitable in its incidence, and will he say why he refuses to allow this group of people remuneration allowable for Corporation Tax at a level commensurate with the services which they render?
§ Mr. DiamondI have said that the level is better, is higher, than the level that was thought appropriate when the hon. Lady's Government were in office.