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Company Cars

Volume 76: debated on Monday 1 April 1985

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asked the Chancellor of the Exchequer (1) what was was the revenue raised by the taxation as a benefit of company cars in each of the past 10 years; and if he will estimate the likely yield for 1985–86;(2) if he will consider raising the threshold to £10,000 for the taxation of company cars; and if he will estimate the ensuing change in annual revenue.

[pursuant to his reply, 28 March 1985]: Estimates of the yield accruing each year since 1977–78 (when the scale charges were introduced as the basis of taxation) from taxing the benefit of company cars available for private use are shown as follows. I regret that information for earlier years is not readily available.

£ million
1977–7860
1978–7965
1979–8070
1980–8185
1981–82115
1982–83*140
1983–84*†275
1984–85†‡330
1985–86†‡385
* Revised
† Includes yield from taxation of car fuel benefit
‡ Provisional
I have noted my hon. Friend's suggestion for an increase to £10,000 in the earnings threshold, below which this benefit is not taxed on employees. Such an increase, applied to car and car fuel benefit would cost about £40 million in a full year at 1985–86 levels.