§ Mr. Hordernasked the Chancellor of the Exchequer what would be the yield of corporation tax if the rate were 10 per cent., 20 per cent., or 30 per cent., respectively, and if no allowance were made for stock appreciation; and what reduction in revenue would occur at each rate.
§ Mr. Peter ReesFollowing are the figures:
Tax rate Yield in 1980–81 £ million) Reduction (£ million) 10 per cent. 2,450 2,400 20 per cent. 3,300 1,550 30 per cent. 4,150 700 These estimates compare the present yield of CT with what it might have been—with the CT rates proposed—if there had never been any stock relief, but other things generally had remained unchanged.
For these illustrative purposes it has been assumed that there would be no change in the yield of advance corporation tax—included in the above figures—but that the amount which could be set against a company's total CT liability would be limited to that corresponding to the CT rate shown. It has been further assumed that income tax suffered on investment income in excess of that rate would be repaid.