Car Scheme Rates

HC Deb 29 June 2000 vol 352 c591W

Mr. Rammell

To ask the Chancellor of the Exchequer (1) if he will authorise a review of the Inland Revenue's fixed profit car scheme rates which were last reviewed in 1997, with special reference to petrol prices for motorists; [128038]

(2) if he will place in the Library details of the methodology used by the Inland Revenue in calculating the motor mileage rates used in the fixed profit car scheme. [128035]

Mr. Timms

Under the current system, authorised mileage rates are calculated by reference to typical tax allowable motoring costs for cars with different engine sizes. The costs include both running costs (petrol, oil, tyres, repairs, replacements and servicing) and standing costs (VED, insurance, depreciation and subscriptions).

The Budget Day 2000 press release REV6 B—"Protecting the environment: reform of company car taxation" announced a review of the authorised mileage rates system which is now under way. The announcement stated that: The Inland Revenue will be considering how the authorised mileage rates for drivers who use their own cars for business journeys (which underpin the Inland Revenue's fixed profit car scheme) might be improved, on a revenue neutral basis, to send better environmental signals. The level and structure of the authorised mileage rates will be considered in the course of the review. Comments are welcome and should be sent by 30 September 2000 to: Kim Linton Personal Tax Division Room 81, New Wing Somerset House Strand London, WC2R 1LB e-mail: [e-mail]