HC Deb 04 May 1994 vol 242 c506W
Mr. Cousins

To ask the Chancellor of the Exchequer if he will estimate the annual value to Customs and Excise of the special provisions in respect of VAT recovery of company cars; and when the provisions were imposed and under what authority.

Sir John Cope

Taxation of the private use of business cars is mandatory under Community law. Since the inception of the tax in April 1973, the United Kingdom has achieved this through restricting tax recovery on the purchase of cars. The current legal basis for this simplified procedure is permitted under article 17(6) of the sixth directive (77/388/EEC) implemented in the United Kingdom by an Order made under section 14(10) of the VAT Act 1983. The provision is expected to contribute around an estimated £1.6 billion to the Exchequer in 1994.