HOw can a black cab driver on UC expense the purchase of a new taxi?

seatbeltnoob

Asking for a friend here (no honestly). I'm not a black cab driver. Friend is a black cab driver with a disability so they work reduced hours and thus now on universal credit. Theyre dyslexic so I help them with their monthly claims.

Their black cab is going to be past it soon and will need to buy new one. 

Does UC Self employed allow capital allowances? They will probably get it on some hire purchase or finance where they pay little bits off at a time. Are the finance costs allowed to be expensed each month? 

I know some of the rules with motoring is quite murky. 

Northern_Wanderer

I could only find that milage can be claimed as an expense, not seen anything about the purchase of the vehicle or monthly repayments for finance.

https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/business-expenses-you-can-report-to-universal-credit-if-you-are-self-employed

Hopefully someone else will clarify.

and this: https://www.entitledto.co.uk/help/SelfEmployedExpensesClaimed looks like if you use actual expenses then acquisition can be included. Presumably whatever the finance amount is each month could be included.

NedS

I'm not an expert on this, so will happily defer to someone with greater / more current specialist knowledge.

seatbeltnoob said:

Asking for a friend here (no honestly). I'm not a black cab driver. Friend is a black cab driver with a disability so they work reduced hours and thus now on universal credit. Theyre dyslexic so I help them with their monthly claims.

Their black cab is going to be past it soon and will need to buy new one. 

Does UC Self employed allow capital allowances? They will probably get it on some hire purchase or finance where they pay little bits off at a time. Are the finance costs allowed to be expensed each month? 

I know some of the rules with motoring is quite murky. 

My understanding: As long as the vehicle has been specially modified for business use (e.g, a black cab), then you can claim that as a capital expense. But to do that, the business has to purchase it and incur that expense. If you pay £30k for your black cab, then you record a £30k expense in the AP in which you make the purchase.

Loan repayments are not a permitted expense on UC. You can claim up to a maximum of £41 per AP for any business loan interest, but you cannot claim for the capital repayment of the loan (because you've already recorded the £30k expense when you took out the loan and used it to purchased the black cab)

Once you have claimed as a capital business expense, you cannot then use simplified expenses for the vehicle (e.g, claim mileage rates), but must rather claim for the actual cost of fuel etc as evidenced by receipts. If you want to claim simplified expenses (e.g, mileage rates) then you cannot also claim the capital business expense.

Again, all covered in the guidance already linked, but again here for reference:

https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/business-expenses-you-can-report-to-universal-credit-if-you-are-self-employed