× Search rightsnet
Search options

Where

Benefit

Jurisdiction

Jurisdiction

From

to

Forum Home  →  Discussion  →  Housing costs  →  Thread

Taxi Driver - Self Employed Accounts

WBrame
forum member

Money Advice, Ipswich Housing Action Group

Send message

Total Posts: 23

Joined: 31 August 2010

Hi

I have had a look and can’t see this query has arisen before although I did find a thread from 2013 in which HBAnorak explained some ways that HB departments calculate entitlement for taxi drivers and my query is related to this.

In my area our local authority use a matrix system based on petrol costs, average mpg and then earnings rate and so for the couple of clients I have dealt with recently the income has come in at £60k+ when it is not.

My query is about what other local authorities do and if there is any case law on this subject.

My local authority look at the petrol costs and then go on the internet to find out the average mpg for the relevant vehicle which they multiply. They then work out the earnings rate for our area and then from this figure they deduct any expenses which have been declared such as car hire, radio hire, petrol etc.

For instance I have a client who only works 30 hours a week as he is returning to the world of work having been unable to work through ill health and feels unable to do more than 30 hours (he works Mon -Fri) and his income has been calculated as £61k. The client says he has to work Mon-Thurs to cover his outgoings and they estimate he is earning £130 per week after all costs.

Is it right that they look at the average mpg - surely the figures on the internet are relevant to new cars in certain conditions and not to older cars and certainly not to cars being used as a taxi?

The client is going to spend 2 weeks recording his mpg at the end of each day and then we will compare this to mileage travelled etc but other then producing a list of days and mpg there is no verifiable evidence as such.

Any other ideas on how to approach this appreciated.

John Birks
forum member

Welfare Rights and Debt Advice - Stockport Council

Send message

Total Posts: 1064

Joined: 16 June 2010

In the absence of other evidence, using the official figures would be a good starting point.

However, given the near recent revelations on the accuracy of emissions (or at least real driving vs the EU test) then the result of using the emissions is highly unlikely to be reflective of the actual MPG/costs.

For instance my vehicle has a claimed official 39.8–43.5 mpg but drivers say they get 29.5 mpg which is around 71% of the claimed mileage.

https://www.honestjohn.co.uk/realmpg/

But how can you evidence this?

Well the official VCA view is as below

...the standard tests, [they] cannot be fully representative of real-life driving conditions.
....The purpose of the official fuel consumption test is to provide data that will permit a comparison of the fuel consumption of different cars, rather than to provide an estimate of average, on-the-road, fuel economy.

http://www.dft.gov.uk/vca/fcb/the-fuel-consumption-testing-scheme.asp

HB Anorak
forum member

Benefits consultant/trainer - hbanorak.co.uk, East London

Send message

Total Posts: 2895

Joined: 12 March 2013

That’s interesting ... I knew the mileage claims were optimistic but I had never thought of them as being a bit like Council Tax valuation bands - a way of ranking vehicles relative to one another rather than an absolute measure of actual fuel consumption.

The background to this is that local authorities have traditionally been very suspicious about certain self-employed trades, especially minicabs, where there is a large number of cash transactions leaving no audit trail and the claimant reports implausibly low earnings year after year.  So councils began to develop tools to test the credibility of what they were seeing in profit and loss accounts.  One such approach is the spreadsheet that checks whether the amounts declared are consistent with one another - if you spent this much on fuel you should have received, after allowing for dead miles, roughly this much in fairs so why is your declaration nowhere near that much?  I have always seen this as a way of testing that the earnings declared by the claimant are in the same ballpark as what you would expect, rather than a substitute earnings figure.  It’s a trigger for closer scrutiny rather than a self-contained HB assessment method.

More recently another method has been developed by councils including Waltham Forest.  It relies on the fact that licensing authorities require minicab operators to record trip details and retain them for a certain length of time.  The details include pick up, drop off and driver ID.  They ask the claimant to get a list of his trips over the past two months and convert it to money using the operator’s tariff.  They then compare this with what is in the accounts.  They say it has made a big difference to the number of claimants declaring suspiciously low earnings.  Also the car’s mileage at MOT dates can show whether it has covered the sort of distance you would expect from the accounts - if the driver says he only works one day a week and does 6000 miles, do the MOTs show vastly more than that and if so how come?

I know it will go against the rightsnet grain to be supporting approaches that basically start from the position that the claimant is probably lying, but I think we have to be realistic and accept that self-employment dealing in cash does not lend itself to traditional verification methods and something a bit different is required.