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.