§ Mr. Haselhurstasked the Chancellor of the Exchequer whether he will announce his proposals for the taxation of car and car fuel benefits for 1983–84.
§ Sir Geoffrey HoweFor 1983–84 I propose to increase by approximately 20 per cent. the scales by which the benefit of having a car available for private use is measured. This increase is in line with that made in each of the last two years. The figures for 1983–84 are set out in the tables below and will be the subject of a Treasury order. Even after this proposed increase the car scales will of course remain far short of the value to an individual of having a car available.
Section 69 of the Finance Act 1981 provides that a further scale charge shall apply where fuel is provided for private use in a company car. I announced last year my decision to postpone the introduction of such a scale until 1983–84 and I now propose that the scale for that first year will be as shown in the following tables.
I have previously announced to the House my decision to postpone for one year to 1983–84 implementation of the proposal to require employers to apply PAYE directly to these benefits. The Inland Revenue has subsequently held extensive consultation with representatives of employers' organisations who have emphasised the problems their members would have faced in taking on this extra task. In the light of those consultations and in order to avoid imposing undue additional administrative burdens on industry and commerce I have now decided not to proceed with the proposal.
Legislation to give effect to the proposals on car fuel and to the decision not to proceed with the direct application of PAYE will be introduced at Committee stage of the Finance Bill, which is published today and which, for technical reasons connected with the wording of Budget Resolution No. 32 passed by the House on 15 March, reflects my earlier decision to postpone these changes pending the further consultations.
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Car Benefits for 1983–84 Table A (The 1982–83 figures are shown in brackets) Cars with original market value up to £14,000 (£11,500) having a cylinder capacity. Cylinder capacity of car in cubic centimetres Age of car at end of relevant year of assessment Under 4 years 4 years or more 1,300 or less £325 (£270) £225 (£180) More than 1,300 but not more than 1,800 £425 (£360) £300 (£240) More than 1,800 £650 (£540) £450 (£360)
Table B Cars with original market value up to £14,000 (£11,500) and not having a cylinder capacity. Original market value of car Age of car at end of relevant year of assessment Under 4 years 4 years or more Less than £4,300 (£3,600) £325 (£270) £225 (£180) £4,300 (£3,600) or more but less than £6,100 (£5,100) £425 (£360) £300 (£240) £6,100 (£5,100) or more but not more than £14,000 (£11,500) £650 (£540) £450 (£360)
Table C Cars with original market value more than £14,000 (£11,500) Original market value of car Age of car at end of relevant year of assessment Under 4 years 4 years or more More than £14,000 (£11,500) but not more than £21,000 (£17,300) £950 (£780) £650 (£528) More than £21,000 (£17,300) £1,500 (£1,260) £1,000 (£840)
Car Fuel Benefits for 1983–84 Table A Cylinder capacity of car in cubic centimetres Cash equivalent 1,300 or less £325 More than 1,300 but not more than 1,800 £425 More than 1,800 £650
Table B* Original market value of car Cash equivalent Less than £4,300 £325 £4,300 or more but less than £6,100 £425 £6,100 or more £650 * Table B applies to cars without a cylinder capacity.