§ Mr. Peter BottomleyTo ask the Chancellor of the Exchequer if he will list the conditions under which(a) volunteer hospital drivers and (b) hon. Members are taxed on notional profits on car allowances.
§ Mr. MaudeThe position in law is that motor mileage allowances paid to individuals, whether employees or office holders, or volunteer hospital drivers, are liable to income tax if the allowances exceed the costs of running and maintaining the car for use for work or office, or for use for driving for a hospital car service. The tax liability arises under schedule E, employees and office holders, and schedule D, volunteer hospital drivers.
Hon. Members, like other office holders or employees, may use a simplified administrative arrangement, known as the fixed profit car scheme, under which "tax free" rates calculated by the Inland Revenue to reflect typical motoring costs can be set against motor mileage allowances received in order to calculate the taxable profit element. Alternatively, hon. Members can choose to keep detailed records of the actual motoring expenses incurred and the precise parliamentary, constituency and private mileage travelled to enable them to make their own claims for relief.
Volunteer hospital drivers may use simple tables drawn up by the Inland Revenue based on the FPCS arrangements, which are available for employees and office holders, to work out if there is any taxable profit element of their motor mileage allowances. The Revenue has compared the rates of mileage allowances paid by the various health authorities with the "tax free" FPCS rates; the tables show a profit figure where the mileage allowances exceed the FPCS rates. Alternatively, volunteer hospital drivers can choose to keep detailed 274W records of the mileage allowances received, the actual motoring expenses incurred, and the mileage driven privately and for the hospital car service.