THE PROFITS TAX

Evening Post, Volume CXXIII, Issue 122, 25 May 1937, Page 9

THE PROFITS TAX

CONCESSIONS MADE

basis Altered

THE BRITISH BILL

UnJted Fress Association— By Electric Telegraph—Copyright. • . (Received May 25, 1.30 p.m.) LONDON, May 24. The Finance Bill, which was issued today, contains substantial modifications to the national defence contribution,- and brings 1936 into the years on which the profits standard is based. The taxpayer is given the choice of taking as his profits basis the average profits of any three out of the four years, 1933, 1934, 1935, and 1936, or any two out of the years 1933, 1934, and 1935. Relief is given where the capital is small or business is carried on under exceptional risks. The system under which the charge is graduated is altered. The concessions may diminish the first yields, but do not modify the ultimate value of the tax. Announcing that a tax would be imposed on businesses, whose profits, exceed £2000 a year, the Chancellor of the Exchequer said in introducing the Budget, that this could be described as a contribution to national defence. The standard of calculating the new tax would be the profits or the capital employed. Where the. profit standard was adopted it would be on the profits for the years 1933, 1934, and 1935, the charge being made on the amount of increase in profits. Thus, on profits up to 6 per cent, there would be no tax; between 6 per cent, and 10 per cent., the tax would be one-fifth of the, gross; between 10 per cent, and 15 per cent., one-quarter of the gross; and above 15 per cent, one-third. Losses since 1933 would be offset against profit. Where the capital standard was adopted the tax Y/ould be on profit, in the case of a company in- excess of 6 per cent, and in the case of individual firms in excess of 8 per cent. The Chancellor said he expected profit* would continue to increase for some tmne. It was anticipated that the 'tax would yield £2,000,000 this year and between £20,000,000 and £25.000.000 next year.