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Fixed Profit Car Scheme

Volume 164: debated on Monday 8 January 1990

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To ask the Chancellor of the Exchequer, pursuant to his answer of 12 December, Official Report, column 564, about the fixed profit car scheme, if he will give details of the mileage bands and car engine sizes whereby the taxable amount is fixed.

[holding answer 20 December 1989]: Under the fixed profit car scheme arrangements the car engine sizes taken into account are those up to 1000cc, 1001 to 1500cc and over 1500cc. The number and width of the mileage bands vary according to the mileage allowances reimbursed under each particular employer's mileage allowance scheme. For every band a "fixed profit" is calculated and employees are taxed on the fixed profit for the band into which the mileage driven on business falls.