HL Deb 16 June 1986 vol 476 cc588-9

2.38 p.m.

Lord Bruce of Donington

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are aware that the Inland Revenue are seeking to tax as "benefits", in the hands of employees, car-parking facilities at their place of work provided by their employers and, if so, what action they propose to take.

Lord Brabazon of Tara

My Lords, the taxation of benefits arising from car-parking facilities is not a new feature of the tax system. The Government propose no changes in this respect.

Lord Bruce of Donington

My Lords, is the noble Lord aware that this particular development is a new departure from the tax system and that over the past few months PAYE audit teams touring the country have been making serious suggestions that this should be the case? Is the noble Lord further aware that the provision of car-parking facilities, which technically are classed as benefits under the taxing statutes, can be divided into four categories? The first is where a cash voucher is given to the employee; the second arises from card admission to a car park; and the third arises from the provision of car-park facilities on the premises of the employer concerned.

Even that can be divided into two. The first is reserved spaces and the second is the free-for-all spaces. If the noble Lord insists that car-parking facilities should be included in the taxable income of employees, will he at least ensure that it is done on a completely equitable basis? In the meantime, I ask the Government: how mean can you get?

Lord Brabazon of Tara

My Lords, no meaner than the Government in either 1948 or 1976, because those were the two years in which these particular provisions came into effect. The noble Lord asked particularly about vouchers. The scheme in that respect was introduced in 1976.

I have to say that where the car park is owned or leased by the employer as part of his premises and no vouchers are involved, only directors and higher paid employees are taxed on the benefit. The measure of the benefit is the annual value of the space—either the rent paid by the employer or, where the land is owned, its rateable value. Therefore in most cases the annual value is negligible and any benefit would be de minimis and would not be charged.

On another point, if spaces or garages are rented off the premises from a commercial firm the cost would be taxed, as obviously it would be fair to do so.

Lord Bruce of Donington

My Lords, is the noble Lord aware that although the provisions in the taxing statutes giving rise to the taxation of benefits have been in existence, as he says, for a long time, the choice to include the benefits of car parking is a recent move altogether and previous governments have not sought to do that?

Lord Erroll of Hale

My Lords—

Lord Brabazon of Tara

My Lords, perhaps I may first answer the point raised by the noble Lord, Lord Bruce of Donington. It would be taxed as a benefit in kind and added in with all the other benefits in kind. However, as I have said, in most cases it is extremely unlikely that the annual value is sufficient for the tax to be worth collecting.

Lord Erroll of Hale

My Lords, is it not refreshing to find the noble Lord, Lord Bruce of Donington, speaking up in favour of the higher rate taxpayer?

Lord Brabazon of Tara

My Lords, I do not think that there is anything I can say to that.

Lord Williams of Elvel

My Lords, is the noble Lord aware that expenses of an individual travelling to work by car are not deductible and expenses of an individual travelling to work by rail are not deductible, but expenses of an individual travelling to work by aeroplane or helicopter are deductible? Does he have any comment to make on that?

Lord Brabazon of Tara

My Lords, I was not aware of it. I am most interested in what the noble Lord, Lord Williams of Elvel, has said, but I think it goes slightly wide of the Question on the Order Paper.