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Cab allowance

11 August 2009
Issue: 4218 / Categories: Forum & Feedback
A limited company operates a private hire cab business, the cars being hired to the individual drivers. Do these cars qualify for relief under the annual investment allowance or first-year allowance rules?

My client is a limited company which trades as an operator of private hire cars sometimes known as ‘mini-cabs’.

The company owns approximately 60 such vehicles which are normal family saloon cars. These saloon cars are then hired to individual drivers in return for a weekly rental.

Normally one driver would hire the same vehicle for a period of up to two years at a time and certainly for not less than three months at a time. The individual drivers are self employed and rely on work being made available to them via the company’s telephone and radio-bookings system.

My question is whether or not the annual investment allowance (AIA) is available in respect of cars such as these.

Having read FA 2008 Sch 24 it would appear that there is a general exclusion for expenditure incurred in the provision...

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