§ Mr. DICKSONasked the Financial Secretary to the Treasury whether he is aware that, when the Unemployment Grants Committee gives grants to local authorities for relief works, the local authorities are assessed for Income Tax in respect of the proportion of grant relating to interest; whether he is aware that this procedure leaves local authorities under a misapprehension as to their obligations in relief works; and whether he will take steps to make local authori- 1758W ties cognisant of their liability for Income Tax in respect of the interest charges upon such grants?
§ Mr. PETHICK-LAWRENCELocal authorities are, I think, generally aware of the view which the Revenue take as to the proper treatment for Income Tax purposes of grants made by the Unemployment Grants Committee. According to that view, where a grant such as my hon. Friend appears to have in mind is made by reference to the interest payable on a loan, the annual amount of the grant must be taken into account in deter mining the Income Tax liability of the recipient. I understand, however, that in the near future a case in which the General Commissioners have upheld this view may come before the Courts for a decision.