§ Mr. McCrindleasked the Chancellor of the Exchequer what would be the estimated additional cost of allowing employers to set against tax the cost of luncheon vouchers at the level of 25p, 35p and 45p per day; and how this compares with the cost to the Revenue at the present level of 15p per day.
§ Mr. Robert Sheldon,pursuant to his reply—[Official Report, 17th March 1978; Vol. 946, c. 408]—gave the following information:
It is not known how the provision of luncheon vouchers by employers is distributed between companies liable to corporation tax and other employers liable to income tax. However, if it is assumed that the expense is wholly set-off against corporation tax, the tax cost of allowing as an expense against taxable profits luncheon vouchers of the values now provided by employers is about £16 million; on the further assumption that all employers currently providing vouchers increased their value to the specified levels regardless of the tax treatment in the hands of the employee, the additional and total costs would be as follows:
£ million Additional Total 25p 9 25 35p 19 35 45p 29 45 The figures make no allowance for the fact that without luncheon vouchers some other form of remuneration, equally costly to the employer, might well be provided.