Ivor Callely
Question:120 Mr. Callely asked the Minister for Finance the amount of money a person (details supplied) would have to earn to claim back the cost price of a taxi licence. [31032/01]
Written Answers. - Tax Reliefs.
I am informed by the Revenue Commissioners that the cost of a taxi licence may be written off at the rate of 20% per annum. The cost of the licence is deemed to have been incurred on 21 November 1997 or, if later, the date the taxi trade commenced. The cost of the licence reduces the income of the taxi owner for the purposes of income tax, PRSI and levies. It is not allowed by way of tax credit. Accordingly, the maximum value of the allowance in respect of the licence is the cost of the licence at the taxi driver's marginal rate of tax for the years over which the cost is to be written off.
I am informed that it is not possible from the information supplied to calculate the actual value of the allowance to the particular taxi owner that the Deputy has in mind, as this depends on the individual's particular circumstances. In addition, some of the allowance will be written off over future years and the value of it will depend on the marginal rates of tax that will apply to the individual for those years.
The possible tax savings, based on expenditure of £85,000, 107,915, on a taxi licence are set out on the following table. The calculations assume that the income relieved by the allowance in each year would otherwise be charged fully either at the higher rate or at the standard rate. The actual saving in terms of tax would vary where part of the income in question was charged at the higher rate and part charged at the standard rate.
|
Tax Year |
Allowance [write off @ 20% of licence cost per annum] |
Ir£ |
Higherrate of tax |
Savings in tax[assume taxable @higher rate] |
Ir£ |
Standard rate of tax |
Savings in tax[assume taxable @standard rate] |
Ir£ |
|||
|
1997-98 |
17,000 |
21,585 |
48% |
8,160 |
10,361 |
26% |
4,420 |
5,612 |
|||
|
1998-99 |
17,000 |
21,585 |
46% |
7,820 |
9,929 |
24% |
4,080 |
5,180 |
|||
|
1999-00 |
17,000 |
21,585 |
46% |
7,820 |
9,929 |
24% |
4,080 |
5,180 |
|||
|
2000-01 |
17,000 |
21,585 |
44% |
7,480 |
9,497 |
22% |
3,740 |
4,748 |
|||
|
2001 [short year] |
12,580 |
5,973 |
42% |
5,283 |
6,708 |
20% |
2,516 |
3,194 |
|||
|
2002 |
4,420 |
5,612 |
Assumerate of 42% |
1,856 |
2,356 |
Assumerate of 20% |
884 |
1,122 |
|||
|
Total |
85,000 |
107,927 |
38,419 |
48,782 |
19,720 |
25,039 |