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Deduction for expenditure incurred in deriving income from driving chauffeured private hire car or taxi

Income Tax Act 1947

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—(1) Subsection (2) applies for the purpose of ascertaining an individual’s income from driving a chauffeured private hire car or taxi for an authorised purpose that is chargeable to tax under section 10(1)(a) (called in this section specified income), for the basis period for the year of assessment 2019 or a subsequent year of assessment.(2) Despite any other provisions in this Part, if there are any outgoings or expenses that are deductible against the specified income derived in the basis period, then there is to be deducted, in lieu of those outgoings or expenses, an amount computed in accordance with the formula A × B, where —(a)A is 60% or such other percentage as may be prescribed by rules made under section 7; and(b)B is the gross amount of the specified income derived in the basis period.(3) However, subsection (2) —(a)only applies if, at the time the specified income is derived, the individual —(i)holds a vocational licence granted under section 110 of the Road Traffic Act 1961 authorising the individual to drive; or(ii)is otherwise permitted under that Act to drive,a chauffeured private hire car or taxi, as the case may be; and(b)does not apply if the individual has made an election under subsection (5) to disapply subsection (2) to the individual’s specified income derived in the basis period.(4) Subsection (2) also does not apply to any specified income derived by an individual as a partner in a partnership.(5) An individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller to disapply subsection (2) to all of the individual’s specified income derived in the basis period for a particular year of assessment.(6) If an individual derives specified income (other than income mentioned in subsection (4)) from driving more than one vehicle in a basis period, the individual may not make an election under subsection (5) in respect of only one or some of those vehicles.(7) Where an individual makes an election under subsection (5) to disapply subsection (2) to all of the individual’s specified income derived in the basis period for a particular year of assessment, then (despite anything in this Act) —(a)any outgoings or expenses incurred in that basis period and deductible against the specified income under any provision of this Part, that is in excess of the specified income, is not available as a deduction against any other income of the individual for that year of assessment; and(b)section 37 or 37D applies with the necessary modifications to such excess, except that the excess may only be deducted against the individual’s specified income that is derived in the basis period for a subsequent or preceding year of assessment, as the case may be.(8) In this section —“authorised purpose” means —(a)the carriage of passengers; or(b)the collection, conveyance and delivery, for reward, of any cargo not incidental to the carriage of any passenger in a motor vehicle, and any goods, article, food or baggage which is unaccompanied by any passenger travelling in the motor vehicle must be treated as cargo, but only if such collection, conveyance and delivery is approved by the Registrar pursuant to rules made under the Road Traffic Act 1961;“chauffeured private hire car” means a motor car that —(a)does not ply for hire on any road;(b)is hired, or made available for hire, under a contract (express or implied) for use as a whole with a driver for the purpose of conveying the hirer, and one or more passengers (if any), in that car; and(c)in respect of which a licence is issued under Part 5 of the Road Traffic Act 1961 for its use as a chauffeured private hire car;“Registrar” has the meaning given by section 2(1) of the Road Traffic Act 1961.[14ZC

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