§ Mr. Barnettasked the Chancellor of the Exchequer if, where a close company as defined by the Finance Act, 1965, changes its status and becomes an open company during the course of its accounting year, the company is assessed to Corporation Tax as a close company on an apportionment basis or whether the assessment depends upon the status at a given date, and if the latter on which date.
§ Mr. DiamondI assume my hon. Friend has in mind the restriction on the deduction for directors' remuneration. In the case he puts, any excess of directors' remuneration over the permitted limits would first be calculated for the whole accounting period, but only a proportionate part of the excess, corresponding to the part of the period during which the company was close, would be disallowed.
§ Mr. Costainasked the Chancellor of the Exchequer how many estimated assessments to Corporation Tax were made in 1966; how many of these assessments were in respect of established companies whose liability did not arise until 1st January, 1967; and whether the number could have been reduced if the Inland Revenue were to delay making 10W assessments until the assessable profits were agreed with the taxpayer or the end of November, 1966, whichever was earlier.
§ Mr. DiamondAbout 140,000, most of which were on established trading companies liable to pay Corporation Tax on 1st January, 1967. The reduction possible by adopting the proposal in the last part of the hon. Member's Question would be comparatively small. Any such procedure would cause serious administrative inconvenience and possible delay in payment of tax.