§ Mr. Jim Spicerasked the Chancellor of the Exchequer why tax is payable on company-provided air fares for wives joining their husbands who are permanently working abroad.
§ Mr. Robert SheldonWhere a company provides the air fare for its employees' wives to join their husbands who are working abroad, and the husband is earning £5,000 a year or more, the cost of the fare is taxable as a benefit in kind on the employee under the rules of Chapter II of Part VIII of the Taxes Act. This applies only where the employee remains resident for tax purposes in the United Kingdom and so liable to United Kingdom tax on his earnings. As I announced during the Report stage of the Finance Bill, the Government are considering what changes are called for in the provisions of the Finance Act 1974 concerning United Kingdom employees working abroad, including the tax treatment of the benefits they receive.