§ Mr. David ShawTo ask the Chancellor of the Exchequer (1) what is his latest estimate of the proportion of the benefit to an individual taxpayer of company car capital, running and maintenace costs which are taxed under present arrangements; and how much additional tax revenue would be received by the Government if that proportion were increased to 100 per cent. of such costs;
(2) what is the amount of additional tax revenue that would be raised by charging employees' and employers' national insurance contributions on the full benefit obtained by individual taxpayers from company cars.
§ Mr. Norman Lamont[holding answer 23 January 1989]: The benefit of company cars provided to directors and higher paid employees is taxed by reference to a set of scale charges. The results of independent studies are consistent with the Government's view that the value to typical employees of being able to use their company cars privately exceeds the present scale charges. But the value to any particular employee depends on a wide range of factors. It is not possible, therefore, to provide an estimate of the aggregate extent to which the private use of company cars is undertaxed, nor of the additional revenue which would arise if the full value to the employee was used in computing income tax or national insurance contributions.