2 Jobs wrote:
If one "buys" a hackney plate from a previous holder, is the purchase price allowable against tax? I wondered because it is almost a "black market" transaction.
Well it's not really illegal as such, so perhaps 'grey market' is a better expression.
But it's treated as a capital asset rather than an ongoing expense, so the price is allowable against tax, but only when it's resold.
Simply speaking if you bought a plate for £20k and sold it for £50k a few years later then you'd be liable for tax on the selling price, but the purchase price is allowed against it, so you'd pay tax on the profit of £30k, or 'capital gains tax', to be precise.
Or if you got a 'free' plate and sold it for £40k then your capital gain would be £40k.
Although that's the basic principle of the thing there are allowances and the like, as outlined in my recent post here:
viewtopic.php?f=14&t=19792As Grandad alludes the plate is normally sold as a package along with a vehicle, so the total price would be divided between the vehicle and the plate for tax purposes.