HC Deb 02 May 1974 vol 872 cc1307-8
13. Mr. Gwilym Roberts

asked the chancellor of the Exchequer if he will propose bringing the tax position of industrial and office workers into line with that of companies by making expenses incurred in the course of their employment such as lunches, travelling to and from work and wear and tear on clothes all allowable against personal taxation.

Mr. Joel Barnett

A deduction is allowable for the cost of maintaining special clothing which an employee needs in his employment. Other expenses of this kind are not allowable against personal tax liabilities, whether the individual concerned is assessable under Schedule D or Schedule E. So far as a company meets the cost of such expenses, the outlay is in substance additional remuneration of the company's staff.

Mr. Roberts

We do not expect tax legislation at this stage, but does my hon. Friend agree that this matter should be considered in the reasonably near future, in view of the unfortunate tendency for an increasing proportion of the population to have to travel considerable distances to work?

Mr. Barnett

I take entirely my hon. Friend's point, but I do not necessarily agree that the course he suggests is the best way to deal with the matter.

Mrs. Kellett-Bowman

Will the hon. Gentleman bear in mind the immense burden that falls on people in rural areas, in terms of going to work, particularly since the imposition of value added tax on petrol? Will the hon. Gentleman seriously consider making this an allowable expense?

Mr. Barnett

There is another Question on that matter on the Order Paper. I do not accept that the problem applies only to people in the rural areas.

Mr. George Cunningham

Does my hon. Friend accept that there is a real advantage in having income taxed under Schedule D rather than under Schedule E, and that a considerable number of employees arrange with their employers to enter into a contract as a result of which they are taxed under Schedule D for the sole purpose of gaining allowances to which most people are not entitled?

Mr. Barnett

I agree that the tax rules provide an advantage under Schedule D, but any employee who obtains private benefit from the use of a car will be assessed on that private benefit.