§ Mr. David ShawTo ask the Chancellor of the Exchequer what would be the estimated effect on receipts of corporation tax over the next five financial years of replacing the existing capital expenditure allowance rates by rates of(a) year one 40 per cent., year two 40 per cent. and year three 20 per cent., (b) year one 33⅓ per cent., year two 33⅓ per cent. and year three 33⅓ per cent. and (c) the accounting rate of depreciation used in a company's accounts.
§ Mr. MaudeThe effect would depend on a number of factors, including the levels of capital expenditure qualifying for allowances, which would be influenced by a change in the rates, and the extent to which companies would be able to set any increases in allowances against profits for tax purposes.