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Income Tax (War Damage Interest)

Volume 446: debated on Tuesday 27 January 1948

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66.

asked the Chancellor of the Exchequer why, for Income Tax purposes, interest on war damage payments is assessed in one sum in the year in which it is paid instead of several sums in the years in which it arose; whether he is aware that this practice is causing grave hardship particularly to poorer people; and if he will correct the method of assessment.

This interest, which only becomes payable when the war damage payment is discharged, ranks under Income Tax law as income of the year in which it is paid, and tax is deductible at the standard rate in force for the year of payment. I cannot see my way to adopt the hon. Member's suggestion for an alteration in the law.