§ Mr. David Steel
asked the Chancellor of the Exchequer what was the total profit chargeable to corporation tax in each financial year since and including, 1972–73.
§ Mr. Trotter
asked the Chancellor of the Exchequer what amount of corpora- 320W tion tax is payable by a company on profits of £30,000; how much additional tax would be payable on additional profits of £10,000; what is the effective marginal rate of tax on the additional £10,000; and how this rate compares with that chargeable on profits of between £30,000 and £40,000 by the USA and the other countries in the EEC.
§ Mr. Denzil Davies,
pursuant to his reply [Official Report, 24th February 1977; Vol. 926, c. 697], gave the following information:
I take the hon. Member to mean by "profits" the net amount chargeable to corporation tax after, e.g., stock relief and capital allowances. If it has no net chargeable gains, no double taxation relief and no associated companies within the meaning of Section 95 of the Finance Act 1972, a company with profits as so defined of £30,000 in the financial year 1975 would pay corporation tax at the small companies rate of 42 per cent.; i.e., £12,600. Tax of £6,700 would be payable on an additional £10,000 of profits, a marginal rate of 67 per cent., bringing the overall rate on profits of £40,000 to 48.25 per cent.
I regret that I cannot answer the last part of the Question in view of the differences between the tax systems of the various countries particularly in respect of the way in which profits are calculated —e.g., treatment of depreciation, relief for increases in stock values—the treatment of dividends and the graduation in rates of tax.