§ Mr. TOUCHEasked the Chancellor of the Exchequer whether it is with his sanction that certain surveyors of taxes claim, for the purposes of Excess Profits Duty, to treat bank deposits as investments, so diminishing the capital employed in the business; and whether he is aware that the effect of this method is to confiscate the deposit interest where the rate allowed is 60 per cent. of the statutory percentage and to mulct the taxpayer still further where the rate allowed is less?
§ Mr. McKENNAThe question whether in any particular case a bank deposit should properly be regarded as an investment is one of fact. Perhaps my hon. Friend would communicate with the Commissioners of Inland Revenue in any case in which he considers an erroneous opinion to have been formed. With regard to the latter part of the question, the conclusion arrived at by my hon. Friend is incorrect. I think he has overlooked the fact that if a bank deposit is treated as capital employed in the business the interest thereon cannot be excluded from the profits.