Tax Injustice
Page 11
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C INCE it is Christmas, and the season when conundrums come pouring out of crackers, we offer one with a transport flavour. When is a goods vehicle not a goods vehicle? The answer, it would seem, is when it is a light van, and ranks for a 30 per cent investment allowance.
On the whole the Board of Inland Revenue do a fair, if thankless, job. But occasionally zeal far outweighs sense. As reported on page 10 they have decided to interpret absolutely literally Section 16 of the 1954 Finance Act, which says: "No investment allowance shall be made of expenditure incurred on the provision of road vehicles unless they are of a -type not commonly used as private vehicles and suitable to be so used."
Whatever the intention of the original legislation, its wording clearly precludes the lighter vehicles which are used extensively as cheap private ears. However, the wisdom of now deciding on such action can be questioned. Is it sensible?
Surely, if a goods vehicle is defined for licence and excise taxation purposes that definition should also be used for inland revenue purposes. Why, as the Traders Road Transport Association rightly points out, tax a van at £27 when a goods vehicle and £17 10s, as a private vehicle but then refuse to accept the difference for inland revenue purposes?
Support is being sought from the Ministry of Transport by the operators' associations. Mr_ Fraser will be doing very much less than his job if he does not heed the injustice of the position, press for a moratorium on the Board's ruling until the passing of the next Finance Act, and in that Act ensure that Section 16 is redrafted to exclude only light vehicles used for private purposes.