Dáil Éireann debate -
Tuesday, 22 May 2001

Vol. 536 No. 5

Written Answers. - Taxi Licences.

Gay Mitchell

Question:

166 Mr. G. Mitchell asked the Minister for Finance if the Revenue Commissioners will examine the case of a person (details supplied) in Dublin 6W; if they will clarify the current situation; and if they will take a reasonable and fair view of his case. [14663/01]

Minister for Finance (Mr. McCreevy)

I am informed by the Revenue Commissioners that the case relates to the availability of capital allowances for taxi licences. Provision was made for such allowances recently in section 51 of the Finance Act, 2001. Section 51 provides for a five year write-off of expenditure incurred on a taxi licence on or before 21 November 2000 at 20% per annum. Where the expenditure was incurred on or before 21 November 2000 it is deemed to have been incurred on 21 November 1997 or, if later, on the date the trade commenced.

The focus of the measure is to provide relief in respect of the cost of acquiring a licence to be used by the owner-operator of a taxi. Relief is not denied where the taxi owner-operator rents the vehicle to others on a part time basis. The measure does not give relief in respect of licences used by the owner for full-time rental.

It is understood that in the case in question the person has five taxi licences, one of which he uses to operate a taxi service and four others which he rents full-time to other operators. Under section 51 of the Finance Act, 2001, he can claim capital allowances on the cost of the licence where he uses it for the purpose of his own taxi business. He cannot claim capital allowances for the cost of the four licences which are rented out. It is understood that he now wishes to transfer his own trade from the least expensive licence to a more expensive licence currently rented so as to maximise the tax relief available. I am informed by the Revenue Commissioners that where the business is transferred in this way the capital allowances for the years leading up to the transfer are notionally deemed to have been made in previous years so that only a balance of the allowance would be available.

If the taxpayer in question wishes to have further clarification on how this notional allowance would operate in his particular circumstances he should contact the direct taxes administration division of the Revenue Commissioners in Dublin Castle at telephone number 6748017.