Some Reflections Upon the Finance Act, 1937
| DOI | http://doi.org/10.1111/j.1468-2230.1937.tb00026.x |
| Published date | 01 March 1938 |
| Author | A. Farnsworth |
| Date | 01 March 1938 |
288
MODERN
LAW
REVIEW
March,
1938
SOME REFLECTIONS UPON
THE
FINANCE
ACT, 1937
NE
has perhaps to
go
back to the famous Lloyd George
Budget of
1909
to find a parallel to the outburst of bitter
criticism which, after the first flush of enthusiasm, greeted
the new tax-the National Defence Contribution-proposed by
the present Prime Minister in his budget speech of
1937
;
there
was, however, this difference that this novel tax, in its original
form, was anathematized not only by the Opposition but also by
the great majority of the Government’s supporters who, after it
had been reshaped once in the interval between the budget speech
and the introduction of the Finance Bill, forced its withdrawal and
the substitution of a tax, albeit called by the same name, which
was entirely different both in its principles and in its scope.
The aim of the original National Defence Contribution was to
exact from those concerns, which were making exceptional profits
owing to the Government’s huge rearmament programme,
a
special tribute towards the cost thereof; it was considered that
where higher profits were being made these could be reasonably
considered as the result, directly or indirectly, of rearmament.
The scheme of the original N.D.C. (to use
a
useful nomen-
clature) imposed
a
tax by way of varying percentages of the excess
of the profits made in any period ended after
1936
over the average
of those earned in the standard years. At the option of the tax-
payer he could select any two of the years
1933, 1934,
and
1935
or
any three of those years and
1936
as
the standard years;
where
a
business was commenced between January,
1933,
and
December,
1936,
the standard years were shortened accordingly,
but for all businesses begun after
1936,
there was to be only one
standard of profits, viz. a percentage of the capital employed in
the business, normally
6
per cent in the case of companies-by
a concession the minimum capital could be taken at
a
notional
figure of
E25,ooo
in order to benefit the smaller businesses. The
tax was to be a percentage varying according not only as the
profits made in any accounting period were more or less than
a
percentage
of
the capital employed in the business but also
according as the profits in the standard years exceeded or not
this same percentage. Since the proposal was completely abandoned
it would hardly serve any useful purpose to analyse its provisions
in greater detail.
The tax was attacked as unduly complicated, inequitable
as
between different businesses, crushing all enterprise and new
0
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