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HMRC, leasing an electric cab
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Author:  x-ray [ Tue Apr 16, 2019 10:31 pm ]
Post subject:  HMRC, leasing an electric cab
(Yes, it should be in administration but I thought I’d get a better response here!)
One of our drivers is leasing a new TXe and he reckons he can claim it all back off the taxman, is this true ?
(I think it’s been asked before on here but can’t remember the answer!)
Author:  grandad [ Wed Apr 17, 2019 6:17 am ]
Post subject:  Re: HMRC, leasing an electric cab
The lease payments can be off set against tax in the same way as loan repayments are off set. So if the payment is £250 per month then that would reduce the amount of tax due by £50.00. I doubt that the whole £250 could be claimed.
Author:  mancityfan [ Wed Apr 17, 2019 7:04 am ]
Post subject:  Re: HMRC, leasing an electric cab
I think the whole £250 can be claimed so yeh he’s right.
Author:  MR T [ Wed Apr 17, 2019 2:21 pm ]
Post subject:  Re: HMRC, leasing an electric cab
mancityfan wrote:
I think the whole £250 can be claimed so yeh he’s right.

So do I
Author:  edders23 [ Wed Apr 17, 2019 2:53 pm ]
Post subject:  Re: HMRC, leasing an electric cab
for vehicles which meet the eco rules I think the whole cost can be claimed but for normal cars just a miserly 8% per annum
Author:  roythebus [ Wed Apr 17, 2019 6:10 pm ]
Post subject:  Re: HMRC, leasing an electric cab
Lease costs can be folluy offset against tax. If the driver gets himself VAT registered, he can claim that back too. :)
Author:  wannabeeahack [ Wed Apr 17, 2019 6:28 pm ]
Post subject:  Re: HMRC, leasing an electric cab
Rentals/Lease might be 100% deductable at source, i.e. monthly, £350 off his profits every month

and as said, if he goes vat regd he can reclaim the vat per rental period but would be liable to declare the VAT off each fare
Author:  StuartW [ Wed Apr 17, 2019 9:00 pm ]
Post subject:  Re: HMRC, leasing an electric cab
x-ray wrote:
One of our drivers is leasing a new TXe and he reckons he can claim it all back off the taxman, is this true ?


That's often said about this, that and the next thing but, as grandad in particular says, you can set any relevant expense against your income, but that will just reduce the amount of tax payable - it doesn't strictly mean that you'll 'claim it all back'. You can 'claim it all' against income, but you're not getting the whole cost back.

Don't think any special rules apply to the purchase of electric cars, except that you can claim more of the cost upfront, so if he was actually *buying* the vehicle then he might not have to pay tax at all for a year or two (I think), depending on his income.

But all this means is that the cost is brought forward instead of being spread over a number of years. Eg, if you had 60k in takings ( :shock: ) and the cab cost 50K then you'd have taxable profits of just £10k in the first year. Normally, the cost of a car will be spread over a number of years and is front-loaded, eg £10k in the first year, £8k in the second year, £7k in the third year*, etc

But that's only if you're buying the cab outright, most obviously if you have enough ready cash in the bank to pay the whole lot :roll: or if you're buying it via an HP agreement etc.

But if it's a rental-style lease then none of that applies, and the monthly payments are simply deducted from your income to get taxable profit, and I don't think it's any different if it's an electric cab or bog standard diesel, or whatever.

But if there are any tax advantages to *buying* an electric cab, it's largely the eventual timing of the tax payments that will differ - you'll pay less tax up front, but you'll be paying more than you would otherwise after a year or two. At the end of the day, all of the costs will be set against profits, it's just that *when* they're set against profits may vary.

*On your tax return and computation these costs will be shown as 'capital allowances' and deducted from your profit.
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