Finance Bill

Part of Orders of the Day — Finance Bill – in the House of Commons am 12:00 am ar 17 Gorffennaf 1974.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal 12:00, 17 Gorffennaf 1974

The amendments are designed to increase the relief already afforded by subsection (8). As the scheme of Clause 12 has been explained, the additional charge of advance corporation tax is a "loan" to the Government to be repaid from the liability to corporation tax of a company that has paid a dividend. As the Chief Secretary has recognised in subsection (8), there may be situations in which a company, although it has paid a dividend, will have no subsequent liability to corporation tax. Therefore, it will never get any repayment of its loan to the Government. I may be wrong on this, and I am open to correction.

The Chief Secretary has recognised that particular hardship could arise when a company was in the process of being wound up before 1st January or at the beginning of this year. However, a further situation has occurred to me and I hope that there is some validity in the point. A company may have ceased to trade and therefore will not have a subsequent accounting period for liability to corporation tax against which the additional charge can be set. In other words, it is only another example of a company not being able to achieve a repayment of its loan to the Government. The amendments are designed to deal with that situation and I hope that they will not provoke such a wide-ranging debate as we had earlier tonight.