PART III. Excess Profits Duty.

20.-(1.) "The Finance (No. 2) Act, 1915" (in this part of this Act referred to as the " Principal Act"), shall, so far as it relates to excess profits duty, apply, unless Parliament otherwise determines, to any accounting period ending on or after the 1st day of August, 1917, and before the 1st day of August, 1918, as it applies to accounting periods ended after the 4th day of August, 1914, and before the 1st day of August, 1917.

(2.) Section 38 of the principal Act shall, as respects excess profits arising in any accounting period commencing on or after the 1st day of January, 1917, have effect as if 80 per cent. of the excess were substituted as the rate of duty for 60 per cent. of the excess, or, in the case of an accounting period which commenced before that date but ends after that date, as if 80 per cent. were substituted for 60 per cent. as respects so much of the excess as may be apportioned under this Act to the part commencing on that date.

In calculating any repayment or set off under sub-section (3) of section 38 of the principal Act any amount to be repaid or set off on account of a deficiency or loss arising in any accounting period commencing on or after the 1st day of January, 1917, or, in the case of an accounting period which has commenced before that date but ends after that date, on account of so much of the deficiency or loss as may be apportioned under this Act to the part commencing on that date, shall be calculated by reference to duty at the rate of 80 per cent.

Any additional duty payable by virtue of this section in respect of a past accounting period may be assessed and recovered notwithstanding that duty has already been assessed in respect of that period.

(3.) It shall be the duty of every person chargeable to excess profits duty, if he has not previously given notice of his liability to be charged with excess profits duty in respect of any accounting period, to give notice to the Commissioners within two months after the termination of any accounting period in respect of which he is chargeable, or, if the accounting period terminated before the passing of this Act, within. 1 month after the passing of this Act.

If any person fails to give the notice required by this provision he shall be liable on summary conviction to a fine not exceeding 100l., and to a further fine not exceeding 101. a day for every day during which the offence continues after conviction therefor.

21. Section 43 of the principal Act (which relates to excess mineral rights duty) shall have effect as if 80 per cent.

of the excess were substituted as the rate of duty for 60 per cent. for any accounting year commencing on or after the 1st day of January, 1917, or, in the case of an accounting year which commenced before that date but ends after that date, as if 80 per cent. were substituted for 60 per cent. as respects so much of the excess as may be apportioned under this Act to the part commencing on that date, and any additional duty may be recovered accordingly:

Provided that where it is shown to the satisfaction of the Commissioners that the amount payable as rent under any lease or agreement for a lease for any accounting year in respect of which or any part of which excess mineral rights duty is payable at the rate of 80 per cent. is not greater than the average amount payable as rent for the 2 pre-war years the prices in which are selected by the taxpayer for the purpose of determining the pre-war rent values of the rent for the accounting year, or would be reduced below that amount by the payment of excess mineral rights duty, no excess mineral rights duty or, as the case may be, such an amount of excess mineral rights duty only as will reduce the amount payable as rent for the accounting year to the said average amount, shall be paid for that accounting year.

22.-(1.) In computing the excess profits duty of any trade or business which consists wholly or partly of the business of shipping the provisions of sub-section (3) of section 38 of the principal Act (which relate to the repayment of setting off of duty on account of deficiencies or losses) shall not apply in relation to any deficiency or loss in any accounting period commencing on or after the 1st day of January, 1917, and in the case of an accounting period which has commenced before that date but ends after that date, shall not apply in relation to so much of the deficiency or loss as may be apportioned under this Act to the part commencing on that date:

Provided that

(a.) Where the shipping business is carried on merely as ancillary to the principal trade or business, the provisions of this section shall not apply;

(b.) Where the trade or business carried on does not consist wholly of shipping, and the part which does not consist of shipping is not merely ancillary to the business of shipping, such apportionment of any deficiency or loss shall be made by the Commissioners as may be necessary to limit the application of this section to such part of the business as consists of shipping; and

(c.) If in any such accounting period as aforesaid there has been a loss or the profits have not reached the point which would have involved liability to excess profits duty if [1917-18. CXI.]

F

the percentage standard had been adopted, the same amount shall, as respects the deficiency or loss of so much thereof as is affected by this section, be repaid or set off under subsection (3) of the said section 38 as would have been repaid or set off if the percentage standard had been adopted.

(2.) Any appeal under sub-section (5) of section 45 of the principal Act on any question arising under this section shall be to the Special Commissioners.

(3.) In this section the expression "business of shipping' means the business carried on by an owner of ships, and for the purposes of this definition the expression includes any charterer to whom a ship is demised.

64

owner

23. (1.) His Majesty may by Order in Council declare(a.) That under the law in force in any of His Majesty's Possessions excess profits duty is chargeable in respect of any profits in respect of which excess profits duty is also payable in the United Kingdom; and

(b.) That arrangements have been made with the Government of any such Possession whereby, in respect of any profits, only the duty which is higher in amount is to be payable, and the amount of such duty is to be apportioned between the respective Exchequers in proportion to the amount of duty which would otherwise have been payable in the United Kingdom and in that Possession respectively.

(2.) Where any such Order in Council is made, then, if the Commissioners are satisfied that any case is one to which any such arrangements relate, they may, in lieu of any relief granted under paragraph 4 of Part I of the Fourth Schedule to the principal Act, allow or make such remission or adjustments of duty as may be necessary to give effect to such arrangements, so, however, that the effect of such remission or adjustments shall not be less favourable than the relief in lieu of which they are allowed or made.

(3.) The obligation as to secrecy imposed by sub-section (8) of section 45 of the principal Act shall not prevent the disclosure to the Government of the Possession concerned of such facts as may be necessary to enable such arrangements as aforesaid to be carried into effect..

24.-(1.) The provisions of section 4 of "The Munitions of War Act, 1915," with respect to munitions Exchequer payments shall not apply to any profits arising after the 31st day of December, 1916, or apportioned under this Act to the period after that date.

(2.) Munitions Exchequer payments arising on or before the 31st day of December, 1916, or apportioned under this Act to the period down to and including that date shall, after the passing of this Act, be assessed and collected, or, if already assessed but not collected, collected by the Commis

sioners, and shall be computed by them in accordance with the provisions of that Act and the rules made thereunder, and the Commissioners shall for those purposes have all the powers of the Minister of Munitions, including the power of making rules.

For the purposes of such assessment and collection, the provisions for the time being in force with respect to the assessment and collection of excess profits duty (including provisions as to returns and penalties, but excluding provisions imposing any charge of duty or as to the computation of duty) shall apply, and rules may be made by the Commissioners accordingly, and the provisions of section 48 of "The Finance Act, 1916," relating to the adjustment of excess profits duty and munitions Exchequer payments, shall apply subject to such modifications as may be necessary in consequence of the transfer of powers affected by this sub-section.

Any rules made by the Commissioners may specify matters which may be referred to the Minister, or to a referee or board of referees appointed by him, and prescribe the manner in which such cases are to be referred.

(3.) For the purposes of sub-section (3) of section 5 of the said Act, any establishments in which the same person has controlling or preponderating interest may, if the Commis sioners so determine, be treated as belonging to the same

owner.

(4.) Sub-sections (2) and (3) of section 49 of "The Finance Act, 1916" (which relate to the recovery of payments in respect of increased directors' fees), shall apply for the purposes of munitions Exchequer payments as they apply for the purposes of excess profits duty, with the necessary modifications.

25. Notwithstanding anything contained in section 42 of the principal Act (which provides for the reference to the Board of Referees of questions as to percentages, &c.) the Commissioners may, if they think fit, refer to the Board of Referees any application made under that section as respects a class of trade or business, although the application may relate to 'matters already decided by that Board, and the Board may, if they think fit, on cause being shown by additional evidence or otherwise, reopen the case and make any order which they could have made on an application relating to matters not already decided by them, and may revise any order previously made by them affecting that class of trade or business; and any such order or revised order shall, as from such date as may be specified therein, apply and have effect in lieu of any previous order relating to the same matter.

26. In the application of Part III of the principal Act to [1917-18. cxI.]

F 2

excess profits duty for any accounting period ending after the 31st day of December, 1916, the following provisions shall have effect:

(1.) In ascertaining the deduction to be made from the profits of the accounting period in respect of increased capital, or the pre-war standard of profits in cases where there has not been one pre-war trade year, 3 per cent. shall be added to the statutory percentage per annum; and, accordingly, in sub-section (1) of section 41 of, and paragraph 4 of Part II of the fourth Schedule to, the principal Act, the expression "statutory percentage" shall be taken to mean the statutory percentage as so increased.

(2.) The statutory percentage shall, in the case of a trade or business not carried on or owned by a company or other body corporate, be taken to be 8 per cent. instead of 7 per cent.; and accordingly sub-section (2) of section 40 of the principal Act shall have effect as though 8 per cent. were substituted for 7 per cent. :

Provided that nothing in this provision shall affect the amount of the statutory percentage for the purposes of subsection (2) of section 41 of the principal Act.

(3.) Any increase of the statutory percentage under this section shall be in addition to any increase of the statutory percentage which has, before the passing of this Act, been made under section 42 of the principal Act.

(4.) Where the pre-war standard of profits of any trade or business does not exceed 500l., and the profits of the accounting period, after any adjustment in respect of increased or decreased capital, are less than 2,000l., sub-section (1) of section 38 of the principal Act shall have effect as though for 2001. there were substituted 2001. with the addition of onefifth of the amount by which the profits of the accounting period are less than 2,000l.; so, however, that if there has been a loss in the accounting period, then for the purpose of ascertaining the amount of any repayment or set-off under the principal Act the addition allowed shall be such as if there had neither been loss nor profit, and that where the accounting period is a period of less than a year, this provision shall have effect as if there were substituted for 2,000l. and 2001. respectively a proportionately reduced amount.

The foregoing provision shall apply where the pre-war standard of profits exceeds 500l., subject to this qualification, that the amount of the addition shall be reduced by the amount by which the pre-war standard exceeds 500l.

(5.) Where the Commissioners are satisfied

(a.) That in connection with any trade or business two or more distinct and independent industries are carried on in separate establishments, and with books kept in such a