Written question asked by Lord Ezra (Liberal Democrat), in the House of Lords. It was answered by Lord Davies of Oldham (Labour) on Wednesday, 23 May 2007.

Transport: Taxis

Question: asked Her Majesty's Government:Why Euro IV taxicabs, which are fully compliant with European Union emission standards, are subject to a higher rate of vehicle excise duty.

Answer: The vehicle excise duty paid on a taxicab first registered from 1 March 2001 is determined by the vehicle’s carbon dioxide emissions. Therefore, the more polluting the vehicle, the more VED it will pay. The VED for taxicabs first registered prior to March 2001 is determined by the vehicle’s engine size. However, where the use of a vehicle is an essential component of business activity—for example, for taxi drivers—the tax system is designed so that, broadly speaking, businesses can deduct from their turnover all the costs incurred for the sole purpose of generating business profits. Such motoring expenses are therefore allowable for deduction against turnover.

Secondary information

Type: Written question
Reference: 3774; 692 c117WA
Session: 2006-07
Subjects: Excise duties Exhaust emissions Pollution control Taxis Tax rates and bands
Link: View this Written question on www.publications.parliament.uk