§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer if he will estimate the number and percentage of United Kingdom company cars whose tax claims for business mileages fall within the bands(a) 0 to 2,499 miles, (b) 2,500 to 17,999 miles and (c) 18,000 and miles above. [13338]
480W
§ Mr. Jack[holding answer 30 January 1997]: Estimates for 1997–98 are given in the table. "Company cars" are cars made available for the private use of employees and directors. Other cars registered in a company name—that is, short-term hire cars and "pooled cars"—are not included.
Annual business mileage Number of recipients (000s) Percentage of company cars 0–2,499 150 9 2,500–17,999 1,000 59 18,000 and above 550 32 Total 1,700 100
§ Mr. BruceTo ask the Chancellor of the Exchequer if he will estimate the revenue effect of raising the lower business mileage break point for company car taxation from 2,500 miles per annum to 5,000 miles per annum; and if he will make a statement. [13340]
§ Mr. Jack[holding answer 30 January 1997]: It is estimated that, in 1997–98, raising the lower business mileage break point from 2,500 miles to 5,000 miles per annum would yield about £200 million in income tax and about £60 million in employers' national insurance contributions.
§ Mr. BruceTo ask the Chancellor of the Exchequer if he will estimate the income tax yield from the taxation of company car scale benefits in(a) 1996–97 and (b) 1997–98. [13335]
§ Mr. Jack[holding answer 30 January 1997]: It is estimated that the income tax yield from the taxation of private use of company cars will be about £1,500 million in 1996–97 and £1,550 million in 1997–98. There will be a further yield from employers' national insurance contributions of about £450 million in each year.
§ Mr. BruceTo ask the Chancellor of the Exchequer if he will estimate the revenue which would be raised by eliminating the reductions of income tax liability on company cars triggered by higher mileage thresholds. [13339]
§ Mr. Jack[holding answer 30 January 1997]: It is estimated that, in 1997–98, the income tax yield from eliminating mileage discounts on company cars would be about £1,100 million. There would be a further yield of about £325 million from employers' national insurance contributions. This is the direct yield before taking into account changes in behaviour. Employers and employees, faced with substantial national insurance contributions and tax increases—tripled for essential high business 481W mileage company cars—would move away from company cars to employee car purchase schemes and personal leasing, with allowances paid to employees at tax-free rates for their business mileage. This could considerably erode the Exchequer yield from company cars.