Clause 59 - Employees' vehicles: withdrawal of capital allowances
Finance Bill
11:00 am
Mr James Clappison (Hertsmere, Conservative)
I shall be brief, because I have already dealt with the principle of capital allowances. The clause withdraws the ability of employees to claim capital allowances for vehicles used in business travel. If the vehicle that was the subject of capital allowances in the past has retained its value over the period of ownership, so that its market value exceeds its written down value at the beginning of the next financial year, when the new provisions come into force, will an income tax charge be levied on the employee as a result of the difference? Accountants often describe it as a balancing adjustment. The Financial Secretary will want to deal with this question because the consequences could be harsh.