It will be in addition to business mileage allowances of 40p a mile for the first 10,000 miles and 25p a mile thereafter. The mileage allowances do not apply to commuting. The bill also flagged a series of detailed amendments to the self-assessment regime designed to make it run more smoothly. This will allow eligible parents to claim double the current children's tax credit for one year. The allowance, which is worth up to 1,040 a year, will be paid to all families where the highest earner takes home less than 49,535 a year from April 2002.
Eligible families can offset it against their income tax bill.
In a further gesture to families, the bill confirmed reductions in value added tax to 5 per cent for child car seats and extensions in paid maternity and paternity leave. However, corporate tax experts voiced disappointment at the lack of progress on the issue of tax breaks promised by the government last year. Mr Whiting of PwC said he had hoped for more progress on consultations rules relating to the taxation of intellectual property, research and development and capital gains of disposals of big shareholdings. Accountants are dismayed by the delay because the government had promised the changes in part to help defuse the long-running row last year over Budget measures to tighten tax rules relating to companies' overseas profits.