§ 35. Mr. MITCHESON
asked the Chancellor of the Exchequer if his attention has been drawn to the hindrance to house building due to the assessment to Income Tax of unrealised profits in those cases where the builder guarantees the repayment of a portion of the advance by building societies to purchasers; and whether he will take steps to remove this menace to house building?
The computation of the profits of builders for Income Tax purposes is made on precisely the same principles as apply to other traders, and I see no justification for the proposed departure from these principles in favour of a particular trade. It is, how- 500 ever, recognised that there may be cases in which, as a result of the system of guarantees to building societies, the builder's available funds are insufficient to enable payment to be made at the due date of the full amount of the Income Tax charged. Arrangements to meet such cases have been made by the Commissioners of Inland Revenue after consultation with the National Federation of House Builders. I am sending my hon. Friend a copy of the arrangement.