HC Deb 12 July 1956 vol 556 cc574-5
29 and 30. Miss Burton

asked the Chancellor of the Exchequer (1) what limits are imposed by the Inland Revenue on the type and cost of car purchased for business purposes; and if he is in a position to state the approximate aggregate cost of this concession to the Inland Revenue;

(2) whether he is aware of public disquiet at the practice of the Inland Revenue in determining what cars may be used for business purposes; and how many of these business cars are on the Inland Revenue list.

Mr. H. Brooke

The Inland Revenue does not determine what cars may be used for business purposes, but the Income Tax Acts provide that, where a car is used for both business purposes and other purposes, the depreciation allowances in respect of the business use shall be so much only of the full allowances as may be just and reasonable in the circumstances. Accordingly, if the cost of the car is substantially in excess of the amount that would have satisfied reasonable business needs, the Inland Revenue would seek an appropriate restriction of the allowances on that account. I regret that I could not make a separate estimate of the number of business cars or the cost of the relative allowances.

Miss Burton

Without being offensive, may I ask the right hon. Gentleman if he is aware that his reply would seem to be a typical Civil Service one, very involved and giving no information? May I also ask him if he is aware that there is public feeling that this is a real scandal, and that some of these cars, used for so-called business purposes, are most unfair financial transactions? Has the right hon. Gentleman no statement to make on that matter at all?

Mr. Brooke

The hon. Lady could not possibly be offensive. She has asked me two Questions which appeared to suggest that she thought that the Inland Revenue was being too restrictive in this matter. In her supplementary question she has suggested that it was being too generous.

Mr. Jay

Can the Financial Secretary tell us, since presumably the Inland Revenue must know, what proportion of all the passenger cars sold in the home market in the United Kingdom are adjudged by the Inland Revenue to be either wholly or partly used for business purposes?

Mr. Brooke

I certainly could not answer that question without notice.

Mr. Baldwin

Is my right hon. Friend aware that some of us, in the interests of economy, do not agree that a car costing £7,000 should be entered as a farm expense, and that we are only too glad to think that the Inland Revenue is watching that sort of thing.