§ Mr. DafisTo ask the Chancellor of the Exchequer if he will make it his policy to eliminate favourable tax treatment of company cars.
§ Mr. DorrellThe Government's policy is that, so far as possible, there should be broad neutrality in the tax treatment of remuneration paid in cash and in kind. In keeping with that policy, the aim has been to ensure that the statutory income tax scale charges realistically reflect the value to an employee of the benefit of the availability of a car for private use. That has involved substantial increases in the level of the scales since 1979.
With a view to further improvements in the neutrality and fairness of the car scales, my right hon. Friend the Chancellor of the Exchequer announced in his Budget statement that he proposes to introduce price-based scale charges for company cars as soon as practicable. The Inland Revenue will be publishing a consultative document on this in the summer.