Buying a second-hand taxi no receipt

Buying a second-hand taxi no receipt

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A self-employed taxi driver is purchasing a hackney carriage for circa £18k. However, he does not expect to get a receipt for it.

What does he need to do to ensure his capital allowance claim has sufficient backup so as not to cause him a problem further down the line?

Thanks in advance.

Replies (11)

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David Winch
By David Winch
30th Sep 2011 18:07

Why no receipt?

Is the taxi driver paying full market price for the vehicle or is it surprisingly cheap?

It would be a criminal offence to purchase the taxi if it is stolen property and the taxi driver dishonestly acquires the taxi knowing or believing it to be stolen, see s22 Theft Act 1968.

If he purchases it at less than the proper price and he suspects the taxi to be 'criminal property' (meaning that it is proceeds of crime or represents proceeds of crime and he at least suspects this to be the case - for example because the seller is a taxi driver who is not declaring his income) then by acquiring the taxi he could commit a money laundering offence, see s329 Proceeds of Crime Act 2002.  If the driver suspects the taxi may be proceeds of crime he should obtain consent to purchase it from SOCA (in effect by making a Suspicious Activity Report with the 'consent' box ticked) so as to avoid the risk of prosecution for money laundering.

Obviously if you are his accountant and you suspect that the seller of the taxi is evading tax you will need to make a Suspicious Activity Report yourself to SOCA after the taxi has been purchased.

Sorry about my suspicious mind - it's the circles I move in!
David

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By DazedByTheLight
30th Sep 2011 18:21

Hi David

 

Thanks for your reply.

 

The taxi is being purchased at market rate. I am not acting for either party at the current moment in time.

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David Winch
By David Winch
30th Sep 2011 18:36

Puzzled!

Then why are you asking the question and why does the purchaser not expect to get a receipt?

(By the way if you are an accountant and information has come to you in the course of your work which causes you to suspect money laundering you are obliged to report it to SOCA, whether or not you act for the person(s) whom you suspect.)

Paying by cheque, bank transfer or bankers draft will help the purchaser produce evidence of the amount paid.

David

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By DazedByTheLight
30th Sep 2011 19:14

Hi David

 

Thanks for your reply.

 

To clarify further, I am acting in a personal capacity as the potential buyer is a family member.

 

Good suggestion about other payment methods but I doubt the the seller will accept them.

 

I am puzzled because a similar scenario could exist wherein an individual buys a standard car from a private individual with the intention of using it as a taxi. Again he should be able to claim capital allowances against this but apart from the car ownership documents he would have no evidence of the purchase price.

 

This must have come up for others yet I am struggling to find any resources/guidance.

 

Regards
DBTL

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David Winch
By David Winch
30th Sep 2011 19:32

The easiest solution . . .

The easiest solution is to get a written receipt (or sales invoice) from the seller. If one were buying a car privately one could simply write out a receipt and get the seller to sign it.

Presumably the reason why the seller does not wish to provide a receipt and would be unlikely to accept payment by cheque or bankers draft is because the seller does not wish the tax authorities to get full information about the sale (because he is evading tax).

One way for the tax authorities to deal with this is to disallow capital allowances to the purchaser if they find out there is no receipt.

David

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By User deleted
30th Sep 2011 22:28

I smell a rat

If I was parting with £18k - cash or otherwise, but particularly cash - I'd be damn sure to get a written receipt of some form. Regardless of the nature of the purchase.

You say you've come here because you can't find resources or guidance elsewhere - so why not accept the words of one of the forum's more respected contributors. I can assure you, he knows what he's talking about.

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By Steve Holloway
01st Oct 2011 09:43

Your relative would be a fool not to get a receipt .....

as tomorrow when the seller turns up and says can I have my Taxi back he will have no proof that he paid for it!! 

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By DazedByTheLight
01st Oct 2011 09:49

Hi, thanks everyone who has contributed so far.

 

David, I agree, it does seem as if the seller may be trying to avoid tax. However, as he won't provide a receipt I am trying to understand to what degree that leaves the buyer vulnerable and to what extent he can mitigate that risk.

 

BKD, thanks for your advice, and I appreciate what you say about David's valuable contributions.

 

Steve, the buyer would have the car registration documents but they do not prove the value it was purchased at.

 

From the answers above I have formed the opinion that I should advise the buyer to insist on a receipt or else back out of the transaction altogether and look elsewhere.

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By Jon Stow
01st Oct 2011 10:08

For the record

Possession of the registration documents and being the registered keeper is not proof of ownership of a vehicle. I agree, no receipt, no parting with cash.

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By honesty
02nd Oct 2011 15:39

Goods and cash

are exchanged every day without receipt. Some people are nervous about producing "official" documents if they are illiterate or just poorly educated. It doesn't necessarily mean he is intending to defraud. What requires caution here is the exchange value. A written receipt is strong and simple proof (not 100%, especially if on the back  of an envelope) but not the only proof. A sworn statement can also be used especially if backed up by a  witness. This can be further supported by bank evidence (the stated sum being withdrawn just prior  to the purchase or the set up of a loan for the amount). another possibility is an MP3 recording that is properly "signed in". None of these alternative proofs though may  be accepted in an investigation.

 

Assuming that this vehicle is100% clean, I would suggest that the  vendor be made aware that a receipt is necessary for the purchaser's purposes and that the purchaser is prepared to organize this.

 

Alternatively, as there does not seem to any pecuniary advantage in buying this particular vehicle I would drop it like a hot potato and purchase another. There is wisdom in making purchases of this nature from reputable dealers.

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David Winch
By David Winch
02nd Oct 2011 20:48

High Value Dealer

Strictly speaking if the vendor is selling the taxi in the course of his trade and he is accepting payment in cash (banknotes or coins of any currency) of an amount equivalent to more than 15,000 euros then the vendor is a 'high value dealer' and ought to obtain ID from the purchaser under the Money Laundering Regulations 2007.

For some reason I would not expect the vendor actually to ask the purchaser for ID documents in the situation outlined by the original poster!

David

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