§ Mr. Hordernasked the Chancellor of the Exchequer what would be the loss to the Inland Revenue if corporation tax were reduced to (a) 40 per cent. (b) 30 per cent. and (c) 20 per cent.
§ Mr. WakehamThe loss of revenue in a full year at current income levels is very tentatively estimated at:
£ million (a) 1,300 (b) 2,500 (c) 3,300 For these illustrative purposes it has been assumed that there would be no change in company behaviour. In particular the yield and rate of advance corporation tax is assumed to be unchanged—but for (c) the amount which can be set against subsequent corporation tax liability is assumed to be restricted to the 20 per cent. rate. It has further been assumed that the effective rate of tax on companies' capital gains would be unchanged, that all companies would be subject to the same corporation tax rate, and that income tax suffered on investment income in excess of the assumed corporation tax rate would be repaid.