I have been with a client this morning whose effects consisted solely of taxis. I referred HMRC to manual page DMBM655150, final paragraph, which states http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM655150.htm:
In exceptional cases, necessary tools of trade should not be distrained on at all. This will be the case where the distraint would be disproportionate because
- the distraint of the necessary tool(s) of trade would be likely to prevent the defaulter trading;
- the value of the tools is very low compared to the outstanding tax liability
The above two conditions apply in this case.
Tools of trade are explicitly stated on DMBM655150 to include taxis.
HMRC stated that a recent court case means that this has been clarified and does not apply. Unfortunately they were unable to name the case. Can anyone here help please?
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if it was one taxi
but taxis (howmany are there) - these are hardly tools of trade but fixed assets - pull the other one! the link to the manuals is surely not meant to referto fleets
I should have been more clear
There are actually 3 vehicles; an 8 seater used for a school contract, and 2 saloons, of which one at any time might be off the road.
The point is that one vehicle or three, I would like to understand HMRC's case that the paragraph I referred to does not apply.