§ Mr. WigleyTo ask the Chancellor of the Exchequer if he will make it his policy to ensure that no volunteer drivers will be made liable for tax on their mileage during the financial year 1991–92.
§ Mr. MaudeThe position in law is that, if drivers for a voluntary car service receive mileage allowances which do no more than reimburse the expenses they have actually incurred, there will be no liability to income tax. But if they receive allowances which exceed their expenses, the profit may be taxable.
299WThe great majority of drivers cover modest mileages each year and receive modest allowances providing no or minimal profit; and there is no question of taxing these. However, some volunteer drivers receive very significant amounts of allowances. With my approval, the Inland Revenue is considering whether any advice needs to be given to organisations involved with volunteer drivers. Until that review is completed, neither organisations using volunteer drivers nor the drivers themselves will be expected to take any action so far as income tax is concerned, in relation to mileage allowances for voluntary work. Drivers who are in business as taxi, hire car or minibus operators, and do some driving for voluntary car schemes, are regarded as driving in the course of their businesses and should therefore have included any allowances they receive in their business accounts.
I have noted the hon. Gentleman's suggestion about tax liabilities for the year 1991–92. Any new arrangements which may be introduced for what is expected to be the small proportion of drivers who may have a tax liability will be applied only from a current date; and there will be no question of reopening earlier years. I cannot yet say when the Inland Revenue's review will be completed.