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Car Allowances

Volume 470: debated on Tuesday 8 January 2008

To ask the Chancellor of the Exchequer (1) how much his Department has spent on the review of approved mileage allowance payments to date; which non-governmental individuals and organisations the review team has met since the 2007 Pre-Budget Report was published; what liaison there has been between the review team and (a) the Department for Transport and (b) the Department for the Environment, Food and Rural Affairs on this; and what discussions there have been between his Department and trades union representatives on the use of private cars for work purposes by public sector employees as part of the review; (174815)

(2) what account he plans to take of the levels of carbon dioxide emissions from vehicles when next amending the approved mileage allowance payments scheme;

(3) what the reasons were for the extension of the approved mileage allowance payments review; and whether the conclusions of the review will be included in the Budget Report 2008;

(4) what effect the increases in advisory fuel rates agreed by HM Revenue and Customs on 29 November 2007 will have on his Department's review of approved mileage allowance payments;

(5) whether his Department has conducted further research into the average mileage driven for work purposes since the 2007 Pre-Budget Report;

(6) whether the approved mileage allowance payments review will take into account the effect of rising fuel costs on workers who have to use their own cars for work purposes;

(7) what account has been taken of the needs of those who live in rural areas and have to use their car for work purposes in the approved mileage allowance payments review;

(8) whether he plans to use the approved mileage allowance payments review to incentivise the purchase of newer vehicles by employers; and what effect the review will have on the access of employees to a provided vehicle, with particular reference to those working in the care sector.

AMAPs cater for a wide range of car drivers and the rates are designed to take into account all relevant factors. They strike a balance between allowing the running costs of all cars, large and small and delivering the Government’s environmental policy.

The Government wants to ensure that the tax system properly reflects and supports business activity, in addition to promoting fairness and environmentally friendly business travel. We intend to consider the framework of taxation of cars used for business travel as a whole and confirmed at PBR that we will make announcements on future policy in this area, including AMAPs, in Budget 2008.

As a matter of routine, HM Revenue and Customs has liaised with other relevant Government Departments. A range of stakeholder views has also been canvassed—including from industry and user group representatives—and the Government made it clear at PBR that it will continue to consider further representations in the approach to the Budget.