Written Answers. - Tax Licences.
Noel Ahern
Ceist:
238
Mr. N. Ahern
asked the
Minister for Finance
if he will clarify the position in relation to the measures for the taxi industry in the Finance Act, 2001; if he will explain the workings of the relief being given to them; if a person who paid £60,000 for a plate can reclaim this through his tax; the tax year in which the relief will commence; if the relief can be paid to a taximan who rented his plate rather than operate it himself and declared his rental received as trading income; if the person who rented can reclaim if he now operates the taxi himself; and if he will make a general statement on the matter indicating the way in which taxi operators can seek guidance and an explanation of the measures.
[19924/01]
Provisions were made in section 51 of the Finance Act, 2001, for a scheme of capital allowances for expenditure incurred on the cost of taxi licences acquired on or before 21 November 2000. For tax purposes the expenditure is deemed to have been incurred on 21 November 1997, or if later, the date the taxi trade commenced. The allowances are effectively backdated with the cost being deemed to have been incurred on 21 November 1997 where the licence was purchased on or before that date. Where the licence was purchased after 21 November 1997, the allowances can be claimed from the date the trade using that licence commences. The cost can be written off over five years at the rate of 20% per annum.
The section provides that the write-off will be allowed against the trading income of the licence owner who drives the associated taxi. The cost will not be allowed where the licence owner rents out the licence and associated vehicle to another person except where a spouse inherits a licence from his or her deceased spouse. In the latter case, the deceased spouse must have acquired the licence on or before 21 November 2000 and he or she must have carried on a taxi trade.
Relief will not be denied where the taxi owner-driver rents the vehicle to others on a part-time basis. In this latter case the cost will be allowed against both the trading and the rental income from the vehicle in question. Where more than one licensed vehicle is operated in such a manner, the capital allowances will only be available in respect of the cost of a licence relating to one vehicle.
For example, a person who has paid £60,000 may claim relief of £12,000 per annum for five years provided he or she operates the taxi himself or herself full-time or on a part-time basis while also renting the taxi on a part-time basis.
Where a person who rented a taxi now wishes to operate the taxi himself or herself, the capital allowances for the years that the taxi was rented are notionally deemed to have been made for those years so that only a balance of the allowance would be available. For example, if a taxi plate was purchased for £60,000 on or before 21 November 2000 the expenditure is deemed to have been incurred on 21 November 1997. Capital allowances allowed where the owner operates the taxi himself are as follows:
|
Capital Allowances @ 20%
|
£
|
|
1997/98
|
12,000
|
|
1998/99
|
12,000
|
|
1999/00
|
12,000
|
|
2000/01
|
12,000
|
|
2001/01 Short tax year
|
8,877
|
|
2002 Balance brought forward
|
3,123
|
|
Total
|
60,000
|
Where an individual has already submitted a return of income in respect of the tax years for which the allowances are being claimed, the Revenue Commissioners will, in such cases, refund the appropriate amount of tax for those tax years.
Where the owner had been renting out the taxi plate but has now decided to operate the taxi himself or herself in the year 2001-01 the capital allowances will be deemed to have been notionally made for the previous years, that is from 1997-98 to 2000-01. This leaves a balance of £8,877 to be claimed for the year 2001-01, a short tax year, with the remainder of £3,123 carried forward to tax year 2002.
Individual taxi drivers can contact their local inspector of taxes for guidance and an explanation of the measures.
