332 SECRETARIAL PRACTICE
times during the year will be saved. The secretary should
take care to see that the return is comprehensive, as the
responsibility is upon him, and bonuses, overtime and fixed
all-round figure payments for expenses should be included.
In the ordinary course dividends are payable ‘out of profits
or gains brought into charge,’ and in this case prior to 1927-28,
the rate of tax deductible was the average rate in force over
the period in respect of which the dividend was paid, but under
s. 39 of Finance Act, 1927, the tax to be deducted is the stand-
ard rate for the year in which the amount payable becomes due.
Where arrears of preference dividend are paid for previous
years (prior to 1927-28), the rate of deduction is the average
in force over the period during which the profits were made
out of which the dividend is paid. Where payments of
debenture interest are made that cannot be said to be out of
profits or gains brought into charge, owing for instance, to a
series of trading losses, and such interest is separately assessed
[under Rule 21 (2) of the General Rules applicable to all
Schedules, Income Tax Act, 1918], then the tax deducted
should be at the rate in force at the time of payment.
Explanation ~~ Every company within the meaning of the Companies
of Tax Act, 192g—which means a company formed and registered
Deduction to to ye
be annexed under that Act or an ‘existing company (¢.e. formed and
to Warrants. registered under the Joint Stock Companies Acts, the Com-
panies Act, 1862 or the Companies (Consolidation) Act, 1908)
—or a company constituted by letters patent or by or in
pursuance of an Act of Parliament is required under s. 33 of the
Finance Act, 1924, whenever it issues a ‘warrant or cheque or
other order drawn or made, or purporting to be drawn or made
after 30th November, 1924, in payment of any dividend or
interest’ to annex thereto or to accompany it by a statement in
writing showing
the gross amount which, after deduction of the income
tax appropriate thereto, corresponds to the net amount
actually paid; and
the rate and the amount of income tax appropriate to
such gross amount; and
(c) the net amount actually paid.
Failure to comply makes the company liable to a penalty of
£10 for each offence, but the aggregate amount of penalties
under any one distribution of dividends or interest will not
exceed £100.

Deduction ol
Tax from
Dividends.