Clause 70 - Hire cars for disabled people

Part of Finance Bill – in a Public Bill Committee am 2:30 pm ar 11 Mehefin 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury 2:30, 11 Mehefin 2013

Clause 70 is a purely technical amendment. It ensures that the beneficial capital allowances treatment for cars hired to disabled persons continues for recipients of both personal independence payments and armed forces independence payments.

The Government are reforming the welfare system by introducing universal credit. As part of those reforms, the Department for Work and Pensions is introducing personal independence payments, and the Ministry of Defence is introducing armed forces independence payments. Both have effect from 1 April 2013. To ensure that those who are intended to benefit from certain reliefs remain eligible, some technical amendments to the tax code need to be made.

One such amendment is required to the Capital Allowances Act 2001 in respect of cars hired to disabled persons. The capital allowances short-life asset regime brings tax allowances into line with the actual depreciation of plant or machinery when an item is scrapped or sold within eight years of its acquisition. That accelerates the timing of tax relief when compared with assets that cannot be treated as short-life assets. Usually, cars are excluded from the regime, but cars hired to certain disabled people are eligible for short-life asset treatment, as it has the benefit of making the cars cheaper for disabled persons to hire.

The current definition of a disabled person for capital allowances purposes is based on the receipt of certain types of allowance, including disability living allowance. The changes made by the clause will extend the definition of a disabled person for capital allowances purposes. It will include reference to recipients of both personal independence payments and armed forces independence payments with effect from 1 April 2013.

The hon. Lady asked how many cars are hired by disabled people, and how many people will be affected by the measures. More than 600,000 vehicles are leased to people in receipt of certain disability benefits. The impact on individuals who no longer receive disability benefits is unclear and may depend on a number of wider non-tax factors.

The hon. Lady referred specifically to the equalities impact assessment published alongside the announcement of the measure. I know that her question was more detailed. She asked how many of the approximately 500,000 disabled individuals who will no longer receive DLA or PIP will be affected by the measure. I do not have that number, but I will try to find out whether that number exists and we can get further information for her. If I can, I will provide it to her.