§ Mr. Andrew SmithTo ask the Secretary of State for Transport, pursuant to his answer of 23 February,Official Report, columns 244–45, whether the public service obligation grant to British Rail was taxed (a) in the year to 31 March 1992 and (b) in the year to 31 March 1991.
§ Mr. FreemanAlthough the revenue element of PSO grant is taxable, and is taken into account as income in calculating BR's liability for corporation tax, none has been payable for the last few years because BR has had a trading loss even after taking the grant payment into account. The capital element of PSO grant is also taxable, but is taken into account by reducing the amount of expenditure which would otherwise have qualified for tax depreciation allowances.