HC Deb 20 April 1989 vol 151 c232W
Mr. Bright

To ask the Chancellor of the Exchequer if he has any plans to raise the limit for the P11D form and if he will make a statement.

Mr. Norman Lamont

There are no plans to do so.

Mr. Bright

To ask the Chancellor of the Exchequer when the limit for the P11D form was raised to £8,500; and what would be the equivalent figure in current monetary terms.

Mr. Norman Lamont

Employees whose earnings, including the value of benefits, are at a rate of £8,500 or more per year are liable to tax on benefits in kind. All directors are liable regardless of the level of earnings. The earnings threshold—also known as the P11D limit—was set at £8,500 in 1979–80 and, if it had been indexed in line with inflation according to the statutory formula for increasing personal allowances and thresholds, the threshold in 1989–90 would be £18,100.

Mr. Bright

To ask the Chancellor of the Exchequer what is his policy towards indexing the limit for the P11D form in line with inflation.

Mr. Norman Lamont

The Government have at no time sought to increase the threshold at which employees pay tax on benefits in kind, since in principle all employees should pay income tax on the whole of their earnings whether received in cash or in kind.

Mr. Bright

To ask the Chancellor of the Exchequer how many employers currently receive dispensation from the Inland Revenue from completing the P11D form; and how many employees benefit from such dispensations.

Mr. Norman Lamont

It is estimated that, at December 1988, about 23,000 employers had dispensations from reporting employees' expenses payments on forms P11D, an increase of 29 per cent. on the number at October 1987. When a dispensation exists in relation to expenses payments P11Ds may still need to be completed in relation to benefits in kind.

The number of employees covered by dispensations in 1985–86 is estimated to be about 2.7 million. Figures for later years are not yet available but, as there has been a substantial increase in employers receiving dispensations, it is estimated that over 3 million employees are now covered by them.