HC Deb 07 July 1983 vol 45 cc391-2
2. Mr. Andrew MacKay

asked the Chancellor of the Exchequer if he has any proposals to alter the taxation of benefits in kind.

The Financial Secretary to the Treasury (Mr. Nicholas Ridley)

Yes, Sir. The Finance Bill at present before the House contains, at clause 4, a technical measure, closing a loophole in relation to beneficial loans. This measure was originally proposed in my right hon. and learned Friend's last Budget but was not enacted before the general election. In addition, I propose to lay orders giving effect for 1984–85 to the car and car fuel scale benefits proposed in that Budget. In the longer term it remains the Government's view that remuneration in kind should not be treated more favourably for tax purposes than remuneration in cash.

Mr. MacKay

When the Chancellor of the Exchequer considers further alterations in the taxation of benefits in kind, notwithstanding that we are not in the business of encouraging artificial perks, will he take account of the fact that many of my constituents, and many other hon. Members' constituents, are very concerned that, when they do a high business mileage per year, they are out of pocket through no fault of their own? Many of them are making a great deal of money for their companies and for Britain and feel desperately slighted.

Mr. Ridley

My hon. Friend will be aware that many of them are also doing very well out of having a company car for private use. The scales of taxation, even after next year's rates are in force, will be nothing like the value of the availability of a company car to those who have one. He will also know that, for those who drive over 18,000 miles a year, there is a special and very large reduction in the scale charge to tax.

Mr. Ian Lloyd

Will my right hon. Friend say whether the cut-off point of £8,500, above which so many taxes come into operation under the so-called definition of higher incomes, is deliberate or accidental, as it is obviously irrelevant to modern prices?

Mr. Ridley

I entirely agree with my hon. Friend that it has become an anomaly. The previous Chancellor of the Exchequer considered abolishing it, so that the same and correct treatment of the taxation benefits in kind would apply to all taxpayers. I think that that should be our long-term aim and I am grateful for my hon. Friend's support.

Mr. Ashton

Will the Minister also consider the value of benefits in kind at places such as Wimbledon and Ascot? The thousands of bottles of champagne and the many pounds of strawberries that were consumed last month were purchased by companies throughout Britain doling out that sort of largesse. Should not those benefits in kind be taxed as well?

Mr. Ridley

Yes, and I shall also take into account the benefits in kind known as miners' concessionary coal.