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Taxi drivers are set to lose hundreds of pounds in profits due to card payment feesTaxi drivers are likely to lose hundreds of pounds every year if more customers pay by card instead of cash.
New data from ECD Technologies shown to Express.co.uk reveals a cashless society could see taxi drivers massively affected by a loss of earnings.
This is purely down to commission charges which taxi drivers are forced to pay on each card transaction.
The commission charges can range from between 1.5 and three percent taking valuable revenue away from businesses.
Although commission charges are liable for tax relief, the whole fee is not paid back meaning they would still earn more if they were paid in cash.
Based on a commission fee figure of 1.75 percent, ECD Technologies determines drivers earning £30,000 by solely taking card payments could lose £362 per annum.
A spokesperson for ECD Technologies told Express.co.uk: "What happens with the self-assessment at the end of the year all of the drivers, all of their business expenses directly relating to the business are subject to tax relief.
"Because these commission charges have been incurred wholly through the process of someone's work. That's reduced from their turnover to calculate the taxable profit.
"But they are only getting tax relief at 29 percent so the whole amount isn't completely tax deductible."
Analysis by the group shows that a driver only accepting cards would earn £13,754 compared to £14,116 for a purely cash driver.
taxi driver fares copyright ECD technologies
The example suggests a cash taxi driver would have £15,000 in total taxable profits at the end of the year.
Meanwhile, drivers only accepting digital payments would take profits of £14,490 after commission fees were deducted.
It means card-only drivers would pay less tax over the course of the year but this would not be enough to offset the difference.
Taxi drivers across the country are being forced to accept cards by local authorities despite preferring cash.
Transport for London has told all taxi drivers they must fit a TfL-approved payment device inside their vehicles.
Earlier this year, local taxi drivers in Tunbridge Wells were told off by borough councillors after passengers reported being rejected for trips if they didn't pay with cash.
Explaining the analysis, the spokesperson added: "It's two drivers where one driver has received all the fares cash and the other one has received all the fares digitally. They have both earned the same amount of £30,000.
"Tax deductible expenses for the cash driver of £15,000 for the digital driver it's £15,510. That £510 is the commission charges on that £30,000 of earnings."
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