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New Clause—(Profits Of Charitable And Other Companies Registered Without Word "Limited" Exempted From Corporation Profits Tax)

Volume 155: debated on Wednesday 28 June 1922

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  • (1) Corporation Profits Tax shall not he charged on the profits of an association which is registered under Section twenty of the Companies (Consolidation) Act, 1908, as a company with limited liability without the addition of the word ' limited ' to its name, so long as it continues so registered.
  • (2) This Section shall be deemed to have had effect as from the first clay of January, nineteen hundred and twenty-two.—[Sir E. Bartley-Dennis.]
  • Brought up, and read the First time.

    I beg to move, "That the Clause be read a Second time."

    The associations which are affected are such associations as chambers of commerce, university colleges and various other educational institutions, such as the Science and Art Society, also associations like the Air League and Navy League, and others which are incorporated under the Companies Act. They are associations which make no profit, and do not use the word "limited" after their name. As the tax is a Corporation Profits Tax, and as one of the conditions under which they are registered is that they are not to make a profit, it is rather an absurdity to tax the subscriptions that they receive as if they were profits. On that ground alone such an anomaly ought not to remain any longer on the Statute Book. Chambers of Commerce, for instance, have sometimes a balance in hand from their subscriptions, which are their sole source of income. That balance the Inland Revenue authorities regard as profit. It is nothing of the kind. I ask the Chancellor of the Exchequer kindly to consider whether the time has not arrived when an anomaly of this kind should be abolished. It will not cost much to adopt this proposal, and it will remove a clear injustice and an anachronism. At present, this is a tax upon the profits of companies which make no profits, which by law cannot make profits, and which cease to exist as such if they do make profits.

    I am prepared to accept this Clause. The sum involved is comparatively small, and I think the Clause only brings law into proper harmony with reason.

    Question, "That the Clause be read a, Second time," put, and agreed to.

    Clause read a Second time, and added to the Bill.