Mileage allowance

Tax drivers and driving instructors not allowed to claim

Didn't find your answer?

The fixed rate deduction covers expenditure in respect of the acquisition, ownership, hire, leasing or use of cars (except cars designed for commercial use, for example black cabs or dual control driving instructor cars)

By taxi drivers I mean hackney carriage drivers. Only came across this restriction a coupel of months ago but it's cropped up today on a facebook forum today.  It would appear this rule was introduced in 2020, does any one know why?  It seems unfair that other commercial vehicles can use mileage allowance so I'm flummoxed as to why these two trades can't.

 

Replies (10)

Please login or register to join the discussion.

avatar
By David Ex
07th Jan 2024 14:57

Is the distinction vehicles that are “incidental” to a business vs vehicles that ‘are’ the business? No idea.

Thanks (0)
Replying to David Ex:
avatar
By Tax Dragon
07th Jan 2024 15:04

No. The distinction is between a vehicle that is a car, motor cycle or goods vehicle and one which isn't.

Thanks (2)
Replying to Tax Dragon:
avatar
By FactChecker
07th Jan 2024 18:40

Just so we're clear, OP's reference to not being allowed to claim "The fixed rate deduction" presumably refers to 'Simplified expenses if you're self-employed' (i.e. calculating vehicle expenses using a flat rate for mileage instead of the actual costs of buying and running the vehicle)?

Not surprisingly you can't 'double dip' - and specifically cannot claim simplified expenses for a vehicle on which you’ve already claimed capital allowances (or which you’ve included as an expense when working out your business profits) ... which might be the point towards which David was leading?

Thanks (1)
Replying to FactChecker:
avatar
By Tax Dragon
07th Jan 2024 18:58

That was my reading (/assumption) too. Hence my quote came from s94D. (Had it been my words, I would have run 'motorcycle' together as one word.)

Thanks (1)
Replying to FactChecker:
avatar
By legerman
22nd Jan 2024 11:04

FactChecker wrote:

Just so we're clear, OP's reference to not being allowed to claim "The fixed rate deduction" presumably refers to 'Simplified expenses if you're self-employed' (i.e. calculating vehicle expenses using a flat rate for mileage instead of the actual costs of buying and running the vehicle)?

Your assumption is correct, mileage at a fixed rate instead of vehicle costs

Thanks (0)
avatar
By CJaneH
07th Jan 2024 18:29

The Fixed rate probably woud not be advanatagous to most Hackney Cabs or Driving Instructors. Hackney Cabs are usually in urban areas and do a lot of low speed travel in traffic, and driving instructors also do a lot of low speed driving and get through clutches.
I am thinking of petrol and diesel cars with manual clutches

Thanks (0)
avatar
By Ardeninian
09th Jan 2024 09:07

The rule was not introduced in 2020: it was probably just clarified then. The legislation, as Tax Dragon has pointed out, is s94D-G ITTOIA which came in in 2013. Black cabs and dual control driving instructor cars fall under "a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used" so are not "cars" (and are also not "goods vehicles" or "motor cycles") and are therefore not "relevant vehicles" for flat rate expenditure.

I'm not sure where OP's quote comes from but "cars designed for commercial use" is not quite the right test.

Thanks (0)
Replying to Ardeninian:
avatar
By legerman
22nd Jan 2024 11:01

Ardeninian wrote:

The rule was not introduced in 2020: it was probably just clarified then. The legislation, as Tax Dragon has pointed out, is s94D-G ITTOIA which came in in 2013. Black cabs and dual control driving instructor cars fall under "a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used" so are not "cars" (and are also not "goods vehicles" or "motor cycles") and are therefore not "relevant vehicles" for flat rate expenditure.

I'm not sure where OP's quote comes from but "cars designed for commercial use" is not quite the right test.

Sorry for the late reply, I meant to come back to the discussion much earlier. The quote comes from BIM 75005 and didn't appear until 2020 according to the wayback machine (allows you to view a snapshot of a website on selected dates)

Thank you and to TD, for pointing out what the legislation says. I did a google search on s94D-G ITTOIA but only found a Croner article, which I can't access.

I would be interested in what the exact wording from S94 if anyone has it please. A discussion on taxi's cropped up yesterday and someone said hackney's and private hires couldn't claim simplified expenses. I said hackney's couldn't but private hires could (it's more likely black cabs rather than hackneys if I've understood it correctly) and he said he'd been told by HMRC that it applied to private hires too.

Thanks (0)
Replying to legerman:
avatar
By Bobbo
22nd Jan 2024 16:01

Why are you looking up the law on Croner when there's legislation.gov.uk

https://www.legislation.gov.uk/ukpga/2005/5/part/2/chapter/5A/crossheadi...

Thanks (1)
Replying to legerman:
avatar
By David Ex
22nd Jan 2024 16:16

legerman wrote:

. I did a google search on s94D-G ITTOIA but only found a Croner article, which I can't access.

When I Google “s94D-G ITTOIA”, the top result is the gov.uk legislation. Must be my Google Premium subscription. ;)

Thanks (1)