§ Mr. HARRY HOPEasked the Secretary to the Treasury whether, in view of the 282W Income Tax assessment on sewers in Scotland, he will take steps to allow local authorities to retain tax deducted from interest on sewer loans in the same manner as is done on loans for gas, water, and other undertakings where these are assessed on the basis of profit?
§ Mr. BALDWINThe position as regards sewers in Scotland is precisely the same as the position with regard to all non-productive property in the ownership of corporation and other local authorities Income Tax is deductible from payments of interest by such authorities, and falls to be paid over to the Revenue except to the extent to which such interest is in fact paid out of income which has already borne tax. The authorities are not, however, entitled to retain for their own use tax deducted by them from the interest equivalent to the amount of the Income Tax paid in respect of sewers or other non-productive property. The law on this point was clearly defined by a decision of the House of Lords in March, 1907, in the case of the Attorney-Generalv. the London County Council, and it is, of course, of general application.