asked the Minister for Finance when the last change in the present car allowance of £3,500 was made; and the appropriate allowance for each of the years 1970 to 1985, inclusive.
549.
Written Answers. - Car Tax Allowance.
548.
Mr. Cosgrave
asked the Minister for Finance the estimated cost to the Exchequer of increasing the car allowance to (1) £4,000; (2) £4,500; (3) £5,000; (4) £5,500; (5) £6,000; (6) £6,500; and (7) £7,000.
I propose to take Questions Nos. 548 and 549 together.
The matter to which the Deputy refers is not an allowance as such but a restriction. The amount which could qualify for tax relief in respect of the capital cost of a car was limited to £2,500 by virtue of sections 25 to 30 of the Finance Act, 1973. The limit applied in general to expenditure incurred on or after 16 May 1973.
The restriction was subsequently eased to its present level of £3,500 by section 31 of the Finance Act, 1976, in respect of expenditure incurred after 28 January 1976 and the scope of this restriction was extended by section 32 of that Act to limit the amount of car running expenses which could qualify for tax relief.
The full year costs to the Exchequer in 1985-86 terms of extending the limit of £3,500 to the levels proposed by the Deputy are tentatively estimated as follows:
|
Proposed new limit |
Estimated full year cost to the Exchequer |
|
£ |
£m. |
|
4,000 |
4 |
|
4,500 |
8 |
|
5,000 |
11.5 |
|
5,500 |
15 |
|
6,000 |
18 |
|
6,500 |
21 |
|
7,000 |
24 |