§ Colonel Burtonasked the Financial Secretary to the Treasury whether any commission is payable to bankers, or others, on investments made in bonds issued for the purpose of payment of Income Tax or Surtax; and, if so, what is the rate payable?
§ Captain CrookshankNo commission is payable in respect of the issue of Tax Reserve Certificates.
§ Sir F. Sandersonasked the Chancellor of the Exchequer whether he is aware of the uncertainty among taxpayers who are liable to Excess Profits Tax by the fear that in subscribing to the new Tax Reserve Certificates they may be prejudiced; that the notes explaining the prospectus are vague and taxpayers are therefore deterred from taking up certificates to some extent; and will he state that all subscriptions made to the new Tax Reserve Certificates will be treated as capital for Excess Profits Tax purposes, or else define precisely the circumstances in which these Tax Reserve Certificates will be treated as capital for Excess Profits Tax purposes?
§ Sir K. WoodI am aware that some doubt has been expressed in this matter. No taxpayer will be prejudiced by taking up tax certificates for the purpose of paying his tax bills. The position is that so much of the principal of a tax certificate as is accepted in payment of tax or contribution payable in respect of the profits or property of a business will be treated as an asset ranking as capital employed in the business. The amount applied in payment of tax or contribution will of course fall to be deducted in computing capital at the date laid down in paragraph 2 of Part II of the Seventh Schedule to the Finance (No. 2) Act, 1939.