Hi, Could anyone tell me if Hackney Carriage / Private Hire licences are considered goods for the purposes of the new flat rate for Ltd cost traders? an actual 'thing' is received in return for payment and it's exclusively for the purposes of the business (VAT registered taxi firm). I have read VAT notice 733, done my googling and am leaning towards goods but I'm not confident. Can someone kindly advise? - Thanks!
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Imho, no.
But surely this isn't going to tip the 2% scales for a taxi driver ?
It's a highly profitable taxi business thaty has less than 2% fuel costs.
What is the actual "thing" you are receiving?
With over-the-counter software, you are purchasing a physical good. (the disc the software is on).
The licence is a right to operate. If the "thing" is simply a certificate confirming that, I'd say you would struggle. (it's just evidence of the intangible purchased, not a purchased good) If it's a taxi plate that is physically attached to a car then you might have better chance, since that is more analogous to the software disc.
Yet another flaw in this bodged change is exposed.
Actually I think it is a decent starting point for comparison.Thank you @stepurhan. The 'thing' that is received is the yellow plate that it attached to the back of Hackney Carriages. I appreciate your point about software, probably not the best comparison.
The distinction between downloaded software and over-the-counter software is a prime example of how this measure wasn't thought through. Why should these two things be treated differently? The business gets the same thing either way (the software, which is what they really want).
But since they ARE treated differently, then demonstrating a similar setup should be a valid argument. Having the licence in the form of a physical plate sounds worth pursuing on that basis. I'd expect HMRC to contest it though.
Sorry if I'm talking about something else but isn't a taxi licence capital expenditure? We have drivers who bought the right to operate from another taxi due to there being an upper limit on how many hackney operators are allowed in the city and that's definitely a capital purchase and is what gets them that plate. Any annual fees thereafter are therefore surely a subscription and neither count as goods for FRS?
Thank you for your response @Duggimon. To help me understand your reasoning could you tell me how you would categorise a Hackney Carriage licence on the balance sheet?
Intangible asset - akin to Goodwill.
Exactly, we have a lot of hack drivers with two item FARs, licence in intangible and taxi under vehicles.