§ 58. Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that the interest on a bank overdraft enables a recipient to charge such interest against liability to Income Tax and Surtax, even When using the overdraft facilities to purchase a motor car or refrigerator or other consumer durable, Whereas interest on a hire-purchase transaction for a like article is not generally so chargeable for Income 71W Tax and Surtax liabllity; and what proposals he will make for ending this difference.
§ Sir E. BoyleMy hon. Friend is not comparing like with like. Interest on a loan from a bank qualifies for relief from tax under Section 200 (1) of the Income Tax Act, 1952. Under the normal type of hire-purchase agreement, on the other hand, the purchaser's periodical payments constitute rent for hire and interest is not payable as such. No relief is therefore due.