Archived decisions
Volunteer Drivers - Tax free threshold milage: Notice of Motion
Councillor Porter to move:
This Council recognises the valuable contribution made by volunteer drivers
and notes with serious concern the adverse impact of increasing petrol and
diesel prices on volunteer drivers, all of whom are committed to providing
valuable services to the community, often in partnership with the County
Council. It also notes that the limit of 10,000 miles is an arbitrary one set by
HMRC, beyond which the driver is paid at a lower rate of 25p per mile.
Accordingly, this Council, noting that volunteer drivers are withdrawing their
services as a result, makes strong representations to the government for an
increase in the tax-free threshold mileage rate (which has remained
unchanged since 2002) .
That this Council notes with regret the Parliamentary answer to a question
in the House of Commons on the 28 April,2008 that " volunteer drivers can
claim tax relief for the full cost of motoring by completing a [tax] return, if
they wish to do so" and draws to the government's attention the
guidance issued by the Department of Transport - Road Safety Act 2006:
Private Hire Vehicles which cites the HMRC Approved Mileage Allowance
Payment (AMAP) as a method of determining profitability for services
provided by volunteers .
To keep the administration burden to a minimum, especially for those in the
voluntary sector , an urgent increase in rates is requested.'
That this Council requests of the HMRC that the mileage allowance, currently
at 10,000miles beyond which the driver is paid at the lower rate, be increased
with immediate effect to 15,000 miles to reflect more realistically the number
of miles driven by volunteer drivers without profit.
Extract from Hansard ......
28 Apr 2008 : Column 145W Hansard
Taxation: Voluntary Organisations
Bob Russell: To ask the Chancellor of the Exchequer if he will increase the level of mileage for which tax-free expenses may be paid to volunteer drivers of voluntary and charitable organisations. [202096]
Angela Eagle: I refer the hon. Gentleman to the answer given to the hon. Member for Stroud (Mr. Drew) on 12 November 2007, Official Report, column 22W. HMRC allows volunteers to use the approved mileage allowance payment (AMAP) rate for convenience, but it is not mandatory and volunteer drivers can claim tax relief for the full cost of motoring by completing a return, if they wish to do so.
Extract from Department for Transport - Road Safety Act 2006: Private Hire Vehicles - Guidance Note
How will services provided by volunteers be affected (including voluntary car schemes)?
33. Government Ministers welcome the valuable service provided by the many volunteers who offer their time freely to transport less fortunate members of society to and from health appointments and various social events and engagements. Their efforts and kindness benefit society as a whole by contributing towards social inclusion. The Department is aware of concerns about the actual dividing line between volunteers who provide a service using small vehicles and licensed PHV drivers who provide a service on a commercial basis. Each sector has a valuable role to play and this note endeavours to assist those who want to understand what constitutes volunteering and when a service becomes commercial.
34. The Department's view is that the phrase "for hire" in the definition of a PHV implies that there must be an element of commercial benefit to an arrangement for PHV licensing requirements to apply. As a consequence of this we consider that services provided by genuine volunteers who receive no recompense or receive only enough to cover their actual expenses are unlikely to satisfy the definition of a PHV. Therefore in our view such services would not have needed to rely on the contract exemption to avoid
PHV licensing requirements and as such its repeal will not affect them in any way.
35. There is case law which indicates that a service becomes commercial if there is any form of profit or gain by the transport provider _ie: if the service is not simply an act of social kindness.. Drivers will want to satisfy themselves that they are not making a profit from the service they provide if they want to avoid falling within the definition of "private hire vehicle". It is worth reiterating at this point the importance of drivers seeking independent legal advice if they are in any doubt about their own particular case.
36. In determining whether a particular volunteer service is operating legitimately outside the PHV licensing regime, one useful method of calculating the profitability or otherwise of the service might be to consider the rates charged in the context of the rules set out by HM Revenue and Customs _HMRC. For taxation purposes. The rules are explained in a fact sheet which can be accessed on the HMRC's website. Essentially, volunteer drivers' tax free allowance is 40 pence on the first 10,000 miles in the tax year; and 25 pence on each mile over 10,000 in the tax year. The HMRC fact sheet explains how to calculate income from volunteer driving.
37. The particular point has been raised whether voluntary car schemes will be affected by the repeal of the contract exemption. It is our understanding that many such schemes involve the payment of separate fares and as such fall outside the PHV licensing regime and outside the PSV licensing regime - the rules governing car sharing are covered in paragraphs 17-19. The repeal of the contract exemption will not change this.