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Dismissed Workers, Reinstatement Orders (Wage Payments)

Volume 389: debated on Tuesday 4 May 1943

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asked the Chancellor of the Exchequer whether he has considered a recent decision of the High Court to the effect that employers ordered by National Service officers to reinstate workers whom they have dismissed without justification can comply with the law by paying such workers wages whilst refusing to allow them to work; and whether he will take steps to ensure that no money paid out in this way shall be allowed as an expense of the business for the purposes of taxation?

As my hon. and learned Friend is aware, in the computation of profits for taxation purposes a trader is entitled to a deduction of all disbursements and expenses wholly and exclusively paid out for the purposes of the trade, and the question whether any payment is an admissible expense is not a matter for determination by the Inland Revenue Department but is subject to appeal to the Appeal Commissioners. I am advised that in the type of cases to which my hon. Friend refers, in which a trading concern has been required to reinstate an employee, the payment of wages to the employee falls to be regarded as allowable expenditure within the Rule governing the allowance of expenses.