§ 21. Mr. Michael Spicerasked the Chancellor of the Exchequer if he will make a further statement on the taxation of the mileage allowances of essential car users who travel fewer than 3,000 miles each year.
§ Mr. Robert SheldonMileage allowances payable to employees who use their private cars for the purposes of their employment are taxable in so far as they exceed the actual expenses for which they are paid.
The Inland Revenue has reached agreement with several bodies, including the National Health Service, that where an employee receives an allowance for using his car in connection with his employment he should not be taxable on it if he travels 3,000 miles or more a year on business; but that if his business mileage is less than this he should be taxable by reference to a scale which reflects the excess of the allowance over the expenses incurred in the performance of his duties.