§ Mr. Trotterasked the Chancellor of the Exchequer what is the current attitude of the Inland Revenue to the apportionment of road tax and insurance where a cash mileage allowance is paid to an employee to use his own car on business, in the light of the judgment in Perrons v Sparkman.
§ Mr. Peter ReesThe Inland Revenue has always accepted that when a car is used partly for business and partly for private purposes all the overhead expenses incurred by an employee, including Vehicle Excise Duty and insurance, may be apportioned on a mileage basis between the two uses and that part attributed to business use allowed as a deduction in computing the employee's taxable income regardless of whether or not the employee is paid a mileage allowance. It has no plans to change this approach.