NEW BRITISH TAX ON PROFITS

Southland Times, Issue 23229, 18 June 1937, Page 7

NEW BRITISH TAX ON PROFITS

TERMS MEET WITH APPROVAL LEVY ON GAINS OF NEXT FIVE YEARS (British Official Wireless ) (Received June 17, 6.3(f p.m.) RUGBY, June 16. The terms of the new tax on profits to replace the withdrawn national defence contribution has been issued as a White Paper, and the necessary ways and means resolution will be moved by the Chancellor of the Exchequer (Sir John Simon) on Monday. A tax of 5 per cent, for companies and 4 per cent, for businesses carried on by individuals will be charged on profits arising in the five-year period from April last. The tax is not to apply to the professions. Subject to necessary adaptation profits will be determined on the same lines as for the purpose of income tax. The tax will not apply when the profits do not exceed £2OOO and where they exceed that figure but do not exceed £12,000 an abatement will be allowed of one-fifth of the amount by which the profits fall short of £12,000. Provision will be made for a remission of the tax, in whole or in part, in cases where the commissioners for special areas certify it expedient for the purpose of establishing industrial undertakings in those areas that relief be given. The tax will be deducted in computing the profits of a trade or business for the purpose of income tax. No calculation of capital will be necessary for any purpose connected with the tax. It is estimated that in a full year the tax may be, expected to produce £25,000,000. The Press commends the new tax as a simple and straightforward improvement on the one dropped. The Daily Telegraph points out that taxation of the growth of profits gives way to taxation of all profits, so recovering trades and new enterprises will not be special victims and businesses will not be left in a state of uncertainty about the amount to be paid.