taxi drivers – Yuk

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    irene lowe

    Truth or fiction? I could do with some help on this one – Taxi driver initially rents his ‘cab’ from his mother for £202 a month, when maintenance gets too costly his partner purchases, on H.P with no income of her own, a brand new top of the range Ford Galaxy (8 Seater) having traded in the vehicle for £4000 which was he had originally rented from his mother, the outstanding balance plus interest is payable at £477 per month for 60 months less interest. ( I couldn’t afford that on my salary)
    Whist he was renting the original car from his mother, after deduction of reasonable expenses his available income bordered on the applicable amount, as the cabbie in question only works three days a week. All his expenses are allowed, as there is no personal use of the vehicle as his partner has her own car and they use that instead.
    Now following the purchase of the new car his earning income has increased, he still only works three days a week (by choice) however if we allow the new car and other expense, which have also increased as a result, in full his available income remains at just above the applicable amount – his explanation is that he can now take more passengers in one go as he has an eight seater as he only works weekends this gives him the greater chance of maximising his earnings, unfortunately not his available income .

    We have considered restricting the allowance given for the car on the basis that it was not a justifiable expense as no benefit has been derived from it but we would equally like to restrict his allowances for radio rental, insurance etc as these are weekly amounts that we are required to deduct from his part-time income – in a round about way H.B is not only paying his rent but also purchasing him a new car – any suggestions on how we can calculate his income – as I have said before in respect of the new vehicle there is no personal use any ideas on how we can either apportion his expenses or recalculate his income that would stand up to scrutiny – we have argued this out between us but cannot finds any foundation to do anything which would ultimately legally reduce his entitlement/ increase his available income.


    Very intersting one.

    Could you justify this as ‘ capital repayments of a business loan used to EXPAND the business’ which is not allowable. He has said that purchasing bigger car allows him to increase his income!!


    What about…. seeing that he did not own the original cab but rented it from his mother, the loan on the new one cannot be classed as replacing a business asset as it wasnt an asset in the first place, so the capital repayment cant be taken in on that loan. I agree with Simo- he is expanding his business.

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