Taxi Drivers

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    Julian Hobson

    We recently took the brave step of retraining staff on how self employed claims should be dealt with and included a revised process for taxi drivers. To cut a long story short we are now comparing the declared income (whether by accounts or self declaration) with an assessment made using mileage declared to taxi licensing colleagues. You won’t be surprised to hear that it has generated appeals and a few complaints (from both customers and staff).

    I’m now looking at revising the process because on the face of it we have made it too simplistic and have effectivel removed an avenue of challenge.

    I am looking to propose that we should compare the two calculations (our own and that provided) and where there is an obvious discrepancy we should ask the customer to clarify the discrepancy. If we get clarification and are happy with it we establish a weekly income based upon that explanation (which could be somewhere between the two calculations).

    If we don’t receive clarification which is acceptable then we will have to draw an adverse inference which might give us a weekly income upto the figure derived from the mileage declared to licensing.

    This looks to be consistent with the investigation that is sometimes (possibly very rarely) undertaken by HMRC.

    and a commissioners case on child support

    I’d appreciate any views including the “your stuck with the accounts presented” argument which I know is favoured by some.

    I’ve looked at the HB regs and can find nothing to suggest that we can’t depart from accounts prepared by an accountant but it is possible that there are more more general principles that I’m unaware of.


    I would agree with your approach entirely.
    It is one that we have occasionally used (about half a dozen times in 3-4 years) when accounts seem to really out of the ordinary – but after an interview with the person over their accounts.
    As you say, if a reasonable explanation is offered etc etc……. 8)

    I agree that there is nothing in the regs (that I anm aware of) to prevent us doing this if we feel that the evidence that has been provided does not stand up to any form of scrutiny.

    We started doing this a few years ago after talking to some tax inspectors from (what was then) the Inland Revenue.
    I cannot give you any further legal basis as none of the cases we have used this method of calculation have excercised their right of appeal (and the word seemed to have got around – the “numbers” we were getting in accounts related to income prepared for taxi drivers seemed to “increase” somewhat!). 😉


    I thought all taxi driver earnt £50 per week? 😀


    Gone up again since I last saw a set of accounts then, Mike! 😯 8)


    But still no tips, I’ll bet…

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