The Inland Revenue has changed its interpretation of the law relating to company bosses working in their chauffeured cars to ensure they cannot rely on earlier statements designed to ensure ministerial cars were tax exempt.
Following that move the Government reacted by introducing a new tax law, which expressly exempts Crown office holders and four senior opposition politicians, including Labour leader Tony Blair, from tax charges on their official cars.
The law has been included in the 1996 Finance Bill which is currently making its way through Parliament and is due to receive Royal Assent by May 5.
However, the new law not only excludes ministers and senior opposition MPs from tax charges on their official cars, which also includes tax on fuel and chauffeur's salary, but any expenses on ministers' travel or subsistence. In addition, the new law extends to the travel and subsistence of a minister's spouse and other members of their family or household.