HC Deb 21 June 1979 vol 968 cc1480-2
3. Mr. Hal Miller

asked the Chancellor of the Exchequer whether he will review the present arrangements under which nurses, health visitors, midwives, radiographers and others are assessed for tax on their mileage allowances which are reimbursement for expenses incurred in carrying out their duties; and if he will make a statement.

The Financial Secretary to the Treasury (Mr. Nigel Lawson)

Nurses, health visitors, midwives and radiographers, like all other employees, are assessed to tax on their mileage allowances only to the extent that these exceed the reimbursement of expenses necessarily incurred in the performance of their duties. I see no reason to review the arrangements recently entered into between the Inland Revenue and the National Health Service as to the tax treatment of these allowances.

Mr. Miller

Will my hon. Friend reflect on the widespread resentment of those working in the Health Service that their mileage allowances, particularly when they are called out at night, should be taxed? Would it not be more sensible to arrange that the mileage allowance should cover expenses? How did the mileage allowance come to include a profit element that the Inland Revenue thought fit to tax? How can that be substantiated, in view of the recent increases in motoring costs?

Mr. Lawson

As I explained in my original answer, there is no special discrimination against health workers. The law applies equally to all workers. The agreement between the Inland Revenue and the National Health Service was that a taxable surplus would normally arise only when fewer than 3,000 miles were travelled. Round figures are negotiated for tax liability in those circumstances. This is meant to assist the workers concerned. If they think that it is wrong and that they would benefit from individual arrangements, they can contest the agreement.

Mr. Michael Morris

Does the Minister accept that members of the Health Service, especially those who go out in the middle of the night, have made a substantial protest over the last year to 18 months since the change was made? Will he have conversations with National Health Service representatives to see if a more satisfactory arrangement can be made?

Mr. Lawson

This is a very complicated question. Taxation of the emergency call-out payment is separate from the taxation of car allowances. The expenses of travelling from home to work, whether in normal hours or during an emergency call-out, do not normally qualify for tax relief because they are regarded as being incurred to put the employee in a position to perform his duties rather than in their performance. In an emergency, to which my hon. Friend refers, when an employee has actually embarked on his duties before starting his journey to work and is then travelling in the performance of those duties, he is entitled to relief for those expenses. A simplified procedure has been negotiated to which I have referred. I hope that my hon. Friend is now fully satisfied.