Flate rate scheme changes

Hackney Carriage licences

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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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RLI
By lionofludesch
17th Mar 2017 12:23

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.

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Replying to lionofludesch:
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By stacksbookkeeping
17th Mar 2017 13:38

Many thanks. To clarify on my OP this is a medium sized taxi firm mainly using self employed drivers who fuel and maintain their own vehicles. The council licencing tho is paid for by the business rather that the individual drivers hence the question. I understood (albeit through 3rd hand info) that physical software licences purchased over the counter in a box count towards goods, I was trying to apply the same logic here....might be stretching it a bit?

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Replying to stacksbookkeeping:
RLI
By lionofludesch
17th Mar 2017 21:26

Why not employ a few ? It should be too difficult to limp over the 2% line.

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Stepurhan
By stepurhan
17th Mar 2017 14:17

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.

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Replying to stepurhan:
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By stacksbookkeeping
17th Mar 2017 14:45

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.

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Replying to stacksbookkeeping:
Stepurhan
By stepurhan
17th Mar 2017 15:21

stacksbookkeeping wrote:

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.

Actually I think it is a decent starting point for 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.

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By Duggimon
17th Mar 2017 15:16

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?

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Replying to Duggimon:
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By stacksbookkeeping
17th Mar 2017 16:03

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?

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Replying to stacksbookkeeping:
RLI
By lionofludesch
17th Mar 2017 16:13

stacksbookkeeping wrote:

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.

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Replying to lionofludesch:
By Duggimon
17th Mar 2017 16:37

Exactly, we have a lot of hack drivers with two item FARs, licence in intangible and taxi under vehicles.

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By stacksbookkeeping
17th Mar 2017 16:41

Well thanks @Duggimon. Have to say I hadn't considered the licences were intangible assets, I've been happily whacking them in the P&L. Guess that puts the scuppers on my goods theory....

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