§ Mr. CousinsTo ask the Chancellor of the Exchequer what is the Government's present policy with regard to the setting of pre-production expenses against tax liability as they are incurred; and what proposals he has to allow this in all areas of economic activity.
§ Mr. DorrellWhen calculating trading profits for tax purposes, revenue expenditure incurred in the five years before a trade commences is treated as if incurred when the trade starts, provided the expenditure would have qualified as a deduction had the trade commenced. Qualifying capital expenditure which is incurred for the purposes of a trade prior to its commencement is also deemed to have been incurred on the first day of trade.
These are general rules which apply to all trades.