HC Deb 25 June 1917 vol 95 cc43-5W

asked the Chancellor of the Exchequer whether, in the case of an industrial and co-operative society with 2,000 members who in 1914 made purchases to the amount of £40,000 and received a so-called dividend of 3s. in the

pound, it is held, according to Rule 10, Fourth Schedule, Part I., of the Finance (No. 2) Act, 1915, to have realised £6,000 as profits for the pre-war trade year; whether, in the case of the same society in 1915, the members again receiving a dividend of 3s. in the pound and purchasing the same quantities of provisions, but, owing to the increased market values, at a cost of £60,000, it is held, according to the same rule, to have realised £9,000 as profits; whether, the surplus arising from transactions with members being similar in 1914 and 1915, the Excess Profits Duty of 60 per cent., subject to certain deductions, was levied upon £3,000, or the difference between the £6,000 pre-war and the £9,000 owing to the War; and whether, in view of the fact that there was no increase in the the so-called dividend and no addition to the quantities purchased, the Excess Profits Duty was levied, not upon profits, but upon the increased cost of food and other necessaries of life?


The hon. Member has not correctly reflected the operation of the Excess Profits Duty. The pre-war standard of profits is fixed by reference to the surplus of the two years selected by the society out of the three last pre-war years and the surplus in any year as computed for purposes of Excess Profits Duty may differ in most material particulars from the aggregate amount paid as dividends on purchases. As regards the last part of the question, I would refer him to the answers I have given to previous questions put by him.