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Company Cars

Volume 114: debated on Wednesday 8 April 1987

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asked the Chancellor of the Exchequer what is his best estimate of the value of petrol purchased by businesses for (a) their own use and (b) that of their employees in 1986–87; what was the value of the benefit paid to the directors and to higher-paid employees; how much of this was subject to the scale charge; and what is his estimate of the amount of revenue from income tax and national insurance contributions in 1987–88 due from assessments under the same charge.

It is estimated that the value of petrol purchased by sectors other than the personal sector was about £2·4 billion in 1985, the latest year for which information is available. This estimate includes purchases by companies and the public sector but excludes unincorporated businesses. I regret that information about the use of petrol purchased is not available.The taxable value of any free fuel provided for the private use of a director or higher paid employee is determined by reference to a set of scale charges and does not depend on the amount of fuel provided. It is estimated that, in 1987–88, the taxable value of free fuel provided for private use will be £450 million leading to an income tax yield of around £160 million. The provision of free fuel for private use does not affect national insurance contributions.