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Corporation Tax

Volume 19: debated on Friday 5 March 1982

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asked the Chancellor of the Exchequer if he will publish in the Official Report a table showing what would be the effect on revenue of changing the basis of corporation tax to the basis outlined in subparagraph (1) of paragraph 6.3 of the Green Paper (Cmnd. 8546) retaining the present rates of corporation tax and abolishing accrued loss-relief in respect of unusual capital allowances and stock relief in terms of the 1979 or 1980 figures.

If it were to be assumed that businesses would have sufficient funds to meet the increased tax charge and that there would be no change in the scale and pattern of their trading, the nominal yield from charging tax at present rates on gross trading profits, at historical cost, before deducting depreciation and after deducting interest, and with the disallowance of any relief from previous years for unused capital allowances and stock relief, would be an increase of some £9½ billion to some £14 billion in 1980–81. It is, however, unrealistic to make assumptions of this kind and the actual effect upon revenue of attempting to impose a tax regime of this kind cannot be estimated.