§ Mr. Richard Shepherdasked the Chancellor the Exchequer what is the average percentage of industrial profits deducted in central Government taxation in the United Kingdom; and what information he has from international other nations in the West.
§ Mr. Peter Rees,pursuant to his reply [Official Report, 25 May 1979; Vol 967, c. 302], gave the following answer:
Corporation tax is in general Charged at 52 per cent. on taxable profit after deducting
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Company Tax Payment (Taxes on company income and corporation tax on capital gains) £ million Percentage of gross trading profits Percentage of gross national product (1) (2) (3) 1960 … … … … 733 19.7 3.2 1961 … … … … 836 23.0 3.4 1962 … … … … 1,001 27.8 3.9 1963 … … … … 881 21.5 3.2 1964 … … … … 815 17.9 2.8 1965 … … … … 760 16.0 2.4 1966 … … … … 837 18.2 2.5 1967 … … … … 1,186 25.6 3.4 1968 … … … … 1,220 23.2 3.2 1969 … … … … 1,321 23.3 3.3 1970 … … … … 1,671 28.2 3.8 1971 … … … … 1,522 22.7 3.1 1972 … … … … 1,545 20.7 2.8 1973 … … … … 1,841 20.6 2.8 1974 … … … … 2,679 28.2 3.6 1975 … … … … 2,248 22.2 2.4 1976 … … … … 2,229 17.3 2.0 1977 … … … … 3,145 20.3 2.5 1978 … … … … 4,024 24.0 2.8 Sources: National accounts data April 1979 Economic Trends (1) From 6 April 1973 the figures include advance corporation tax. (2) Gross trading profits including stock appreciation. (3) Gross national product at factor cost. capital allowances and stock relief. There are lower rates chargeable on small businesses but against this some advance corporation tax is not set off against mainstream corporation tax because of insufficient taxable profits and the effects of foreign tax relief. Taking these two factors into account the average rate, taking companies as a whole, would be rather more than 52 per cent.
I regret that I cannot make meaningful international comparisons. There are differences in the systems of company taxation, accounting conventions, the statistics available, rates of inflation and the relative size and industrial composition of the corporate sector.