Another Dip into the Purse
Page 30
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THE decision of the Special Commissioners of Income Tax in the appeal of Bramford's Road Transport, Ltd., • has deep significance for hauliers whose businesses were acquired by the British Transport Commission. It means that they are liable for balancing charges on the sale of their property if the compensation received for it was greater than its written-down value after the deduction of the tax allowances.
Argument revolved around Section 17 of the Income Tax Act, 1945, which requires that a balancing allowance or charge shall be made when machinery or plant used for business purposes is disposed of or destroyed before the undertaking comes to an end. The appellant sought to prove that the business permanently ceased when it was compulsorily acquired by the B.T.C.
It was submitted that the Commission did not succeed to Bramford's trade, because when a privately owned business was acquired, it was merged in the new trade of an immeasurably larger public undertaking. The Commissioners, however, were satisfied that, in the Transport Act, 1947, Parliament took every precaution to ensure that the businesses of private operators should not be discontinued before the date of transfer.
On the evidence they found that from the day of acquisition; the Bramford business was conducted by the Commission much on the previous lines, at least for about five months, when it was amalgamated with a bigger unit. During that period Bramford's name was used and all but two of the transferred lorries were engaged on the same routes for the same customers as before. The Commissioners therefore decided that the B.T.C. succeeded to the trade and carried it on in an identifiable form, consequently the business was not discontinued before its assets were transferred.
The facts of the case are probably applicable to most hauliers whose undertakings were acquired and they may now be faced with substantial balancing charges. Although the decision has gone against its members, the Road Haulage Association has performed a valuable service in sponsoring the appeal and in securing an authoritative ruling on this contentious question.