Chief Inspector of Taxes' Branch, References: P.S.1496/44 B.10/JB
Imperial Hotel,
Llandudno, Caerns.
To: Inspector, City 15.
The reports hereunder have been considered by the Chairman of the Board who has decided to take no action on the question of Charity Exemption which might seem to invite a claim under Section 24, Finance Act 1927. As regards the E.P.T., the Chairman prefers to have the position explored before he replies to Sir Alan Barlow's letter of 13th June.
The papers have accordingly been handed to me by the Deputy Chief Inspector with verbal instructions to ask you to deal with the draft E.P.T. computations for c.a.p.'s ended 31st March 1941 as soon as possible. In their letter of 12th June last the Accountants promise to submit their computation of capital employed for the purpose of a substituted standard in due course and to complete the draft E.P.T. capital and profits computations to 31st March 1943 as soon as the two years ended 31st March 1943 have been dealt with for Income Tax purposes. Please proceed as soon as possible to obtain these additional computations from the Accountants and to consider to what extent the substituted standard will "mitigate the extraordinary incidence of E.P.T." (to quote paragraph IV (V) of the memorandum forwarded with the Vice-Chancellor's letter of 10th June on these papers). In this connection, while you should give sympathetic consideration to any claim made by the Accountants, you should refer to me any suggestion that the computation of capital should depart from the basis laid down in the Statutes and the Instructions or if any dispute or difficulty should arise.
It will be necessary to advise the Chairman in due course as to progress made as his reply to Sir Alan Barlow obviously cannot be postponed indefinitely. It is therefore desired that you should press on with the computations as rapidly as circumstances permit so as to obtain and deal with the full E.P.T. computations with a minimum of delay.
A copy of this reference and of my report of 6th July is attached for retention by you in case you wish to have copies in your file.
J.B.
21st July, 1944