§ Mr. Alfred MorrisTo ask the Chancellor of the Exchequer how much disabled employees will have to pay at the maximum in additional income tax on the cost of the necessary alterations to a company car for their use; and if he will make a statement.
§ Mr. Dorrell[holding answer 26 May 1994]: The new system for taxing employees on the private use of cornpany cars is based on 35 per cent. of the price of the car for tax purposes. The price of a car for tax purposes includes the price of accessories with the car. The amount of income tax any individual taxpayer has to pay on a company car depends on the list price of the car and the price of the accessories. "Accessories" includes optional extras such as an automatic gearbox or power steering, and special equipment for disabled people.
Income tax is not charged if a car is provided for travel to and from work because a person is severely and permanently disabled to the extent that he or she can get to work no other way; the car has been specially adapted to the employee's needs; and no other non-business use of the car is permitted or made.
If such a person uses the specially adapted car for other private travel the journeys to and from work are treated as if they were "business" travel. This means those journeys count towards the discounts from the car benefit charge.
360Wtable. The figures show that the tax thresholds for pensioners have risen significantly in real terms. For the single pensioner with an average income, real after-tax income rose by over £30 per week between 1978–79 and 1992–93 and for a married couple the increase was over £80 at 1992–93 prices.
In addition, disabled people may be entitled to the mobility component of the disability living allowance which gives extra financial help to those whose disability impairs mobility.