§ Mr. Dixonasked the Chancellor of the Exchequer what consultations he proposes on a scheme of corporation tax relief for unincorporated associations and other bodies with objects of a public nature, and precluded by their constitution from distributing income or capital.
§ Mr. NottThe Select Committee on Corporation Tax recommended that such bodies should be subject to corporation tax at a lower rate than companies generally. As my hon. Friend the Chief Secretary explained however during, the Budget debates, this recommendation raises considerable problems of definition, for a very wide range of organisations comes within this category, not all of which should necessarily be treated alike. My hon. Friend said then that the only practical way of dealing with the problem was to have further consultations in the light of the choice of system announced, and that later in the summer the Inland Revenue would be initiating discussions with interested bodies.
The Inland Revenue has now prepared a brief consultative document setting out the nature of the problem. It is available from the Board of Inland Revenue, Somerset House, Strand, WC2R ILB, and I have had copies placed in the Library.
Representatives of unincorporated associations and other bodies which might be affected by these measures are invited to make their views known, both on the general principle of a special rate of tax for such bodies, and on the formulation of a possible definition. Associations 341W with profits of not more than £15,000 a year will of course in any event obtain relief under the special rate of tax provided for small companies by Section 95 of the Finance Act. Representations should be addressed to the Board of Inland Revenue at Somerset House.