On the BMB changing its status to a Trustee Savings Bank on April 1st 1976, the No 1, No 3 and Current Account Departments were combined,
and named the Investment Department. Corporation Tax was liable on the profit of this department as detailed in a note to the accounts
(for the period April 1st to November 20th 1976):
Corporation Tax has been provided at 52% on the surplus for the period shown
on the Investment Department. Discussions are taking place with the Inland Revenue to establish the position relating to the transfer
values for tax purposes of assets and liabilities taken over from the Birmingham Municipal Bank. Until these discussions are concluded
it is not possible to determine the actual liability to Corporation Tax.
The following year the Investment Department was renamed
the 'New Department' and the Taxation charge for the last three years of the Birmingham Municipal Trustee Savings Bank was calculated
as follows:
|
|
1977 |
1978 |
1979 |
|
|
£000 |
£000 |
£000 |
|
Corporation Tax @ 52% |
|
|
|
|
On the assessable surplus for the
year |
1,045 |
533 |
1,843 |
|
Prior year adjustments |
(155) |
--- |
--- |
|
Deferred Tax |
|
|
|
|
For the year |
123 |
547 |
554 |
|
|
1,013 |
1,080 |
2,397 |
As
described above initially, the facility granted to the Bank to reclaim Income Tax deducted from certain investments was conditional
on completing a return showing details of interest paid to depositors. Any reclaimed amount due but not paid at the financial year
end was included with Sundry Debtors, and the amount is not known. However, that information was disclosed in the accounts for the
period April 1st 1976 to November 20th 1979:
|
|
1976 £000 |
1977 £000 |
1978 £000 |
1979 £000 |
|
Income Tax deducted at source |
1,737 |
1,698 |
2,318 |
2,074 |
|
Corporation
Tax due |
600 |
1,045 |
|
|
|
Interim Claim Received |
|
|
1,260 |
1,050 |
|
Tax Recoverable |
1,137 |
653 |
1,058 |
1,024 |
With the amount
of Income Tax payable by the Bank not always being agreed with the Inland Revenue at the date the Annual Accounts were published,
it was normal to create a Reserve in the Balance Sheet to cover possible liabilities. This "Reserve for Income Tax" was shown in the
Annual Accounts as a Liability in certain years from 1947 to 1967:
|
Year Ended March 31st |
Amount of Reserve (£) |
|
1947 |
15,000 |
|
1948 |
15,000 |
|
1949 |
0 |
|
1950 |
0 |
|
1951 |
7,500 |
|
1952 |
12,500 |
|
1953 |
20,000 |
|
1954 |
20,000 |
|
1955 |
20,000 |
|
1956 |
20,000 |
|
1957 |
20,000 |
|
1958 |
20,000 |
|
1959 |
35,000 |
|
1960 |
35,000 |
|
1961 |
35,000 |
|
1962 |
35,000 |
|
1963 |
35,000 |
|
1964 |
35,000 |
|
1965 |
35,000 |
|
1966 |
35,000 |
|
1967 |
35,000 |
The
£35,000 reserve held at March 31st 1967 was absorbed into the General Reserve the following year.