§ Sir G. TOULMIN
asked the Secretary to the Treasury whether in a partnership formed since the imposition of the Excess Profits Tax by several persons who work themselves in the business the wages of the working partners are considered as an expense or as part of the profits subject to Excess Profits Tax; whether he will state under what Clauses in the principal Act and in the new Bill the position of such a firm is decided; and whether any special regulations have been made to apply to newly-started firms who are in the position indicated?
Mr. McKINNON WOOD
Sums distributed to working partners as salary are not admissible as deductions for purposes of Income Tax, and the principles of this tax also govern the computation of profits for purposes of Excess Profits Duty under Section 40 (1) of the Finance (No. 2) Act, 1915. On the general position of new businesses under the Excess Profits Duty I would refer the hon. Member to Rule 4208W of Part II. of the Fourth Schedule to that Act, and Clause 40 of the present Finance Bill as amended in Committee. The answer to the last part of the question is in the negative.