§ Ms HarmanTo ask the Chancellor of the Exchequer what estimate he has made of the effect on charities of the changes to the rate of advanced corporation tax announced in the Budget.
§ Mr. Dorrell[holding answer 7 May 1993]: It is estimated that the tax credits payable to charities on dividends paid by United Kingdom companies will 328W eventually be reduced by about £50 million a year. Under the Budget proposals for transitional payments to charities to ease the change to the new rate of tax credit, the cost will rise progressively to this level over the period 1993–94 to 1998–99. In 1993–94 the cost to charities is expected to be about £5 million, on the assumption that about half of tax credits are claimed in the same year in which the dividend is paid. Details of the forecast transitional payments are given in paragraph 5.10 of the 1993–94 Financial Statement and Budget Report.