HC Deb 26 March 1925 vol 182 cc653-4W

asked the Chancellor of the Exchequer whether, seeing that co-operative societies have hitherto escaped the same liability for payment of Income Tax as ordinary commercial concerns on the ground that their busi- ness was restricted to their own registered members, he will consider putting them on the same basis as other trading firms in the forthcoming Budget, in view of the fact that they are now throughout the country inviting the support of the general public and offering to them as an inducement to purchase goods from cooperative stores a free coupon for a £10,000 competition with every bar of soap sold?


The fact that a co-operative society, registered under the Industrial and Provident Societies Act, 1893, sells to non-members does not deprive it of the exemption from Income Tax under Schedules C and D, conferred by Section 39 (4) of the Income Tax Act, 1918, unless at the same time the number of the society's shares is limited by its rules or practice. I would, however, remind my hon. Friend that co-operative societies do not enjoy any general exemption from Income Tax. As is evidenced by the Report of the Royal Commission on the Income Tax (Command Paper 615 of 1920), the tax paid by the societies and their members under the legal provisions which govern their case does not greatly differ from that which would be payable under the ordinary Income Tax law.