Brigadier-General Brownasked the Financial Secretary to the Treasury whether farm profits for the year 1940, under Schedule B, become liable to be assessed for tax under Schedule D in 1942?
§ Captain CrookshankFor the purpose of assessment under Case I of Schedule D the profits of farming, like trading profits in general, are measured by the profits of the taxpayer's year of account immediately preceding the year of assessment. The application of this measure in the case of a farmer who becomes chargeable under Schedule D for the year 1941–42 by virtue of Section 10 of the Finance Act, 1941, is not affected by the consideration that the farmer's year of account preceding the year of assessment may fall within a year or years of assessment for which he was charged to tax under Schedule B on the annual value of his land. In this connection I may invite the attention of my hon. and gallant Friend to the provisions of Sub-Section (4) of Section 10.
§ Mr. Parkerasked the Financial Secretary to the Treasury what proportion of farmers for the last tax year paid their Income Tax on the basis of rent, of the previous year's profits, and of the current year's profits, respectively?
§ Captain CrookshankFor the last tax year, namely, 1940–41, the great bulk of farmers would have been assessed by reference to the anual value of their farms, and only a comparatively small number1404W would have elected to be assessed on the basis of the actual profits of the preceding year. In the current year, however, my hon. Friend will recollect that the last Budget provided that all farmers whose farms exceeded £300 in annual value were no longer to be assessed by reference to that annual value, but were to be assessed under Schedule D on the basis of the actual profits of the preceding year. I am not yet able to state the number of farmers so assessed in the current year.