Taxi drivers to lose tax relief on fuel in the Autumn Statement 2016


Mark Alexander - Published on 10/11/2016
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angry taxi Driver

Rumour has it that private taxi drivers will no longer be able to offset fuel costs as an expense against their income, thus preventing them from getting unfair tax relief on their fuel.

The Treasury initiative is designed to “level the playing field” with private motorists who have to pay for fuel out of their taxed income.

The drivers and businesses affected have said that fares will increase but one Councillor called them snivelling parasites, preying on tourists and old folk who do not have a vehicle of their own. He said “Taxi drivers are not really a business anyway, they just drive cars, why should they get tax relief on their fuel when other car owners don’t?”

A Geography graduate who first suggested the policy to The Green Party said “getting taxi’s off the road will be good for the environment and traffic congestion whilst making it far safer for people to bike into work.”

J Corbynski, regarded as a complete pillock by most of his left wing colleagues, said “I see this as a perfect opportunity to raise tax from wealthy taxi drivers so that we can pump more money into improving public transport”.

A member of The Landlords Union drew similarities between the policy and the changes George Osborne made in his 2015 Summer Budget to finance costs, which will no longer be treated as a legitimate business expense for private landlords . He said “did anybody really expect the government to stop at taxing only private landlords in this underhanded way?”

Government officials have denied all allegations that they are effectively sacrificing small businesses for the sake of attracting further investment into corporate operators who just so happen to make large donations to their party at election time. They went on to say that grant funding recently announced for corporate operators are a complete coincidence and exist only to improve the transport problems facing the UK population due to its continued growth, particularly in the capital.

A major accountancy body has pointed out that corporate taxi firms will not be affected and that they expect their members to be dealing with several enquiries regarding incorporation. They said “this is nothing like incorporation for landlords as taxi drivers will not be affected by increased Stamp Duty rates and capital gains tax is unlikely to be an issue for them on the basis that their core assets (vehicles) tend to depreciate whereas residential properties owned by landlords generally increase in value over the longer term.”

Media commentators have suggested that taxi fares will rise affecting old folk in rural locations.  The Governments response was that they doubted that very much on the basis that only 1 in 5 taxi businesses would be affected. They were unable to produce figures to substantiate that claim.

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Comments

  • Reply to the comment left by “Dr Rosalind Beck” at “11/11/2016 – 09:16“:

    Of course there will need to be an exemption for “corporates or funds making significant investments in taxis given the role of this investment in supporting the government’s transport agenda” (adapted from the Autumn Statement.)


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  • Member of The Landlords Union - Click Here for Details

    I agree wholeheartedly with this Government initiative and it is to be applauded. Non incorporated taxi drivers will be forced to sell their vehicles, especially if they have more than one taxi and are over leveraged. This will increase the supply of vehicles on the market, lowering the price which will help First Time Drivers, who will now be able to afford to purchase their own vehicle rather than be forced to use taxis and public transport. I do suggest though that the Treasury phase this in over a four year period the same as the very generous benefit that was given to landlords, it’s only fair after all !!


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  • Mark, I thought you were damn serious but I just realised that you might have written this article “Wittingly?”


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  • Reply to the comment left by “Ian Narbeth” at “11/11/2016 – 10:37“:

    We should leave the publication date to the chancellor for whom every day is April 1st.


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  • Hi Mark

    I heard this rumour as well, from a very knowledgeable taxi driver. He gave me this, verbatim:

    “The Governor of the Bank of England had previously issued a warning as he had noticed that more and more people were buying taxis to ply for hire. Despite the price of oil being at a record low, he was concerned that if its price rose, drivers would sell their taxis en masse, bringing down the value of second-hand cars, and leaving their passengers stranded.

    The former Chancellor had said, somewhat ungrammatically, in his Budget Speech “For the wealthiest, every pound of diesel costs they incur, they get 45p back from the taxpayer.”

    His spokesman said “Being a taxi driver is not really a business, they just sit in a car all day, which doesn’t even move for a lot of the time, clogging up spaces which owner-drivers could park in. Then when they do finally move, they get in the way of hard working owner-drivers, slowing them down from getting to where they are urgently needed to work hard.”

    Taxi drivers said the former Chancellor was a liar. One explained “We do not get a penny from the taxpayer. We deduct the cost of fuel when calculating our profit just like the bus companies – and just like any other enterprise that runs a vehicle.”
    .
    Taxi drivers have warned that they will have to raise fares, but a Treasury spokesman laughed and said according to our calculations they won’t be able to charge more, but thanked them “for taking the trouble to make us aware of these concerns”. He was still chuckling as he put the phone down.

    The Treasury Minister told the Commons that we do not expect this change to have a large impact on either vehicle prices or fare levels due to the small proportion of the transport market affected, and the Office of Budget Responsibility, it is worth noting, have endorsed this assessment. The Minister forgot to add that the members of the Office of Budget Responsibility had been chosen by the sacked Chancellor.

    When the drivers said they would have to sell their taxis to avoid going bankrupt, a government transport spokesman said that that would not be playing fair, as there would not be enough room for all their passengers on buses, of which there was already a desperate shortage, and thousands of people would be left on the streets. He added that the government valued the private transport sector very highly.

    The Geography graduate said that people who can’t afford a car will buy the taxis.

    Large taxis that can carry 5 or more will have most of the seats removed so that they only accommodate two people

    Corbynski said that passengers should have the right to buy the vehicle they are sitting in. The discount will depend on the time they have been in it, which will be shown on the meter. This will encourage investment in the provision of transport vehicles.”


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  • Member of The Landlords Union - Click Here for Details

    I see in the small print of the Chancellor’s statement that taxi operators specialising in “airport transfers” are exempt. I’m guessing this is due to them operating in the holiday market.


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  • Reply to the comment left by “Appalled Landlord” at “11/11/2016 – 11:42“:

    Thank you AL. We all know that taxi drivers are mostly rogues so it will be great to see them forced to sell their taxis to people who are more deserving of owning them. Admittedly, the latter will probably be more middle class than the taxi drivers and will need to get a good few thousand off Mummy and Daddy – and the taxi drivers probably did have to work hard and save up to afford their taxis and all the fees they pay to the council and so on – but these taxi drivers are living off the proceeds of hard-working people and it shouldn’t be allowed. However, I think that at the same time, taxi drivers should be encouraged not to pass these additional costs on to their customers. They will be needed for example, to get children with special needs to school – so they would be awful, dreadful people if they tried to pass these costs on. They should do everything they can to avoid letting people down in this way – including selling their house for instance, if necessary, in order to keep fares low.

    Although some taxi drivers won’t own their own home and will be renting off those awful private landlords. If that is the case they will simply have to go on rent strike.


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  • Reply to the comment left by “Dylan Morris” at “11/11/2016 – 11:54“:

    Yes, it makes perfect sense to exempt those involved in non-essential holiday services and to apply this only to the more essential taxi services that people cannot do without.


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  • Reply to the comment left by “Appalled Landlord” at “11/11/2016 – 11:42“:

    Oh how you have all made me laugh this morning. Mark: I loved your opening article and …. just for a moment ….. I thought it was real! Then came ALL the witty responses – Ros, Ian, too many to mention all of you. Then BAM!!, Appalled Landlord – what a terrific response. Maybe you should write scripts for a resurrection of “Yes Minister”, sounds so close to the truth. This was a real tonic this morning – and I shall be dipping in again later today for the follow-ups. Well done all of you; you’ve managed to keep us smiling even in the face of the absurd landlord/tenant tax!


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