Selling taxi licences and plates
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The sale of a business, including taxi plates and licences, is GST-free if the sale is of a going concern.
The sale of a going concern is where:
GST is not payable on the sale if the following requirements are met:
Sale of taxi business
You are an owner/driver and decide to sell your taxi business, which is made up of a taxi licence, motor vehicle and meter. The sale includes all things necessary to continue operating the business, including the licence, the motor vehicle and the meter. You continue to operate the business until the buyer takes over. This is a sale of a going concern.
If the licence, the motor vehicle or meter is sold on its own, it is not a sale of a going concern as all things necessary to continue operating the business have not been supplied.
Sale of taxi licence/plate
You own a taxi licence which is leased out. You sell the taxi licence to a third party with the original lessee intact. The activity of leasing a taxi plate is an enterprise. As the sale will include all things necessary for an enterprise to continue to operate, it will be a sale of a going concern.
The sale of a taxi licence to the lessee of the licence, or the sale of the taxi licence to a third party without a lease intact, would not be a sale of a going concern.
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Londoners, daytrippers and tourists who make use of the capital's black taxis will be familiar with a tightening in the throat and sweaty palms when it comes to paying what often appears to be an astronomical fare. This is set to get worse from today as taxi fares in the capital defy the pay freezes in place elsewhere, and rise by 2.3%.
The average cost of hailing a black cab will increase to £10.39 during the day and £14.15 at night, according to Transport for London (TFL). The fare rise, the lowest annual increase since 2004, aims to take into account the rise in average national earnings and will also help drivers cover rising operating costs, which include increases to insurance and fuel costs, it said. Earlier this week, petrol prices rose to an average of £1.20 a litre, the highest on record.
The mayor of London, Boris Johnson, said: "The capital is blessed with wonderful cabbies and we've deliberated long and hard to come up with an increase we think is fair to everyone during these tough economic times."
Bob Oddy, general secretary of the Licensed Taxi Drivers' Association, said: "We welcome this small but important increase. Like everyone else, London's cabbies continue to face significant challenges."
While taxis drivers might breath a sigh of relief at the rise, passengers are likely to be less impressed. Anyone making a journey of more than a few miles will be used to paying substantially more than the average price quoted by TFL.
Before today's rise is taken into account, to travel six miles in the capital cost between £17 and £33, depending on the time of day and how long the journey takes. Meanwhile, a journey between Heathrow and central London typically cost between £40 and £75, though delays or heavy traffic can make this higher.
A separate scheme due to start this autumn will see the cost of a taxi from central London to elsewhere in the capital rise to up to £50. The "golden fares" scheme, devised by Westminster council, will operate from a taxi rank in Leicester Square on Friday and Saturday nights and will require passengers to pay before they get in the taxi.
Minimum rates will start at £20 for up to three miles and will rise to £30 for seven-mile trips. Ten-mile journeys will cost £40, while journeys up to 12 miles will cost £50.
However, price increases are unlikely to deter people from taking the capital's black cabs. Last year the vehicles were voted the best taxis in the world in a survey for the website Hotels.com, despite also being voted the most expensive. London cabbies, who can spend up to four years studying the Knowledge, the infamous in-depth study of a number of pre-set London street routes, were voted the world's friendliest and knowledgeable taxi drivers.
How much will you pay for a taxi in other cities?
City; initial meter charge (£); rate per mile (£); cost of a 10 mile journey
New York City 1.51 1.21 £13.61
Beijing 0.88 0.27 £3.58
Tokyo 4.51 3.20 £36.51
Dubai 0.49 0.43 £4.79
Paris 1.90 1.19 £13.80
Rome 2.41 1.27 £15.11
Mexico 1.11 0.45 £5.61
Source: Mercer Cost of Living survey comparison, September 2009