§ Mr. Powellasked the Chancellor of the Exchequer with reference to the recent statement of the Board of Inland Revenue that they will not in future require banks to deduct Income Tax from deposit interest in circumstances where it has been deducted hitherto, what has led the Board to alter its view as to the requirements of the law governing this matter.
§ Mr. CallaghanThe practice has always been that interest on deposits for less than a year has been paid in full. In the case of deposits for longer periods the practice has varied and the Board of Inland Revenue were recently asked to clarify the position so that practice might be uniform. The Board therefore announced, with my approval, that in these cases also banks would not be required to deduct tax.