Company Cars (Hansard, 16 January 1997)
HC Deb 16 January 1997 vol 288 c449
12. Mr. Robathan

To ask the Chancellor of the Exchequer what steps he intends to take to deter company car users from driving unnecessary miles to obtain tax advantage. [9527]

Mr. Jack

It is for employers to ensure that unnecessary business mileage expenses are not incurred. However, the needs of the genuine high-mileage business traveller are recognised in the current company car tax regime.

Mr. Robathan

I congratulate the Government on their very sensible policies on reducing unnecessary car usage, but is my hon. Friend aware that independent tax advisers tell their clients with company cars to contrive to drive more than 18,000 miles a year, even if that is unnecessary mileage, because they will thereby benefit from the discount at 18,000 miles? Will my hon. Friend reconsider the policy with a view to finding a better way of allowing heavy usage—necessary mileage—while not encouraging unnecessary driving?

Mr. Jack

My hon. Friend makes an important point. We have no plans substantially to change the current taxation regime for company cars. Transport 2000 raised the matter with us, questioning whether unnecessary business mileage was in sum being increased to achieve tax breaks. No evidence of such usage could be found. There is anecdotal evidence, but overall I do not believe that there is widespread abuse.