Vol. 443 No. 6
7 Mr. Callely asked the Minister for Finance if he will give a breakdown on a monthly basis of the number of sales of new motor vehicles in 1994; the revenue returns for this; if he will give comparison figures for each of the years 1992 and 1993; if he has satisfied himself that the projections in the SIMI submissions earlier in 1994 are correct; and if he will make a statement on the matter.
Monthly new car registrations for the period from January to April in each of the years from 1992 to 1994 were as follows:
|
1992 |
1993 |
1994 |
|
|
January |
7,546 |
9,841 |
12,892 |
|
February |
7,050 |
7,451 |
9,983 |
|
March |
9,462 |
7,005 |
12,670 |
|
April |
6,979 |
8,055 |
7,744 |
|
Total |
31,037 |
32,352 |
43,289 |
Due to credit arrangements for payment of VRT, receipts in any month will not necessarily correspond to registrations. In addition, VAT returns are not completed in a manner which would enable the yield from particular items to be identified — an estimate for VAT due in respect of new cars has been established on the basis of VRT receipts. Estimated tax revenues, on the basis of registrations, for the period from Janauary to April in each of the three years are as follows: in 1992, £162 million; in 1993, £158 million and in 1994 £205 million.
In its pre-budget submission, SIMI predicted an additional 30,000 new car sales in 1994 subject to the implementation of a wide ranging package of proposals relating not only to VRT, but to a series of other matters.
The increase in new car registrations in 1994 was well under way before the budget, with registrations in January showing a 30 per cent increase on the previous January. While this higher level of demand is likely to reflect the various favourable influences on consumer and business spending, the reduction in VRT rates, with an increase in the capital allowance threshold for cars, has helped to sustain it.
Does the Minister have a breakdown of the number of company cars which comprise the total? Will he agree that if he wanted to stimulate a spectacular recovery he would need to change the benefit-in-kind provisions which he negatively changed in 1992? Does he have figures for secondhand car imports which are adversely affecting new car sales and a major concern to SIMI?
I am still trying to resolve the problem relating to benefit-in-kind for company cars. Provision of capital allowances is the best way of dealing with companies who wish to supply business cars as a perk for employees. An individual benefits substantially from having a business car, it is income in another form. Changes were made some years ago because we had one of the highest levels of business cars in the OECD. However, there are difficulties for company representatives who clock up high mileage and we are trying to resolve them before the full rate applies in 1995 or 1996.
I have been working with SIMI on the question of the sales of secondhand cars, which have increased in recent years. In the past mostly high powered or expensive cars were imported, but that has changed. The number of cars imported is still high but the profile has changed from expensive cars to those five or six years old valued at approximately £4,500 mainly because they attract low VAT rates and there is a much better cadre of secondhand cars available in the United Kingdom. I am not satisfied with the high number of secondhand cars imported, but if people start buying new cars the position should change in the next few years. Even if they are in the lower value brackets, the number of new car purchases is still extraordinarily high.
