§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether he will publish in theOfficial Report his forecast of the yield in revenue from corporation tax and advance corporation tax in the current financial year and in 1990–91 net of double taxation relief; and if he will include figures showing the amount of tax collected as a percentage of gross trading profit and as a percentage of the amount paid out in dividends.
§ Mr. LilleyThe forecast yield of corporation tax in 1989–90 is £22.4 billion of which advance corporation tax is £6.8 billion. A forecast for 1990–91 will be published in the next Financial Statement and Budget Report.
Mainstream corporation tax collected in 1988–89 was 19 per cent. of the gross trading profit in 1987. Advance corporation tax collected in 1988–89 was 32 per cent. of the amount of dividends paid out in 1988.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether he will publish in theOfficial Report his estimate of the yield to the Revenue from an increase in the rate of (a) corporation tax and (b) advance corporation tax to 50 per cent. in the current financial year, and his forecast for next year.
§ Mr. LilleyThe yield in a full year from increasing the main rate of corporation tax to 50 per cent. would be about £11 billion at 1988 levels of company profits and dividends. The additional yield from increasing the advance corporation tax and small companies rate to 50 per cent. would be about £2½ billion. These estimates take no account of possible behavioural effects following such a change.