§ 55. Mr. Ridleyasked the Chancellor of the Exchequer if a company makes a seven-year covenant to pay a charity £100 a year net, how much the charity actually receives after recovery of tax at existing rates each year; what it costs the company gross per annum; how much the charity will receive after recovery of tax at 8s. 3d. in the £ sterling each year after the introduction of a corporation tax at 35 per cent.; and what it will cost the company gross.
§ Mr. DiamondAt current rates of tax the full amount received by the charity is £163 5s. 3d. The cost to the company is £100, corresponding to earnings before tax of £216 4s. 4d. where Profits Tax is paid at the full rate. With Income Tax at 8s. 3d. the amount received by the charity will be £170 4s. 3d. As to the effect of the corporation tax, I must ask the hon. Member to await my right hon. Friend's Budget statement.