Consider your insurance needs if your business has multiple vehicles. There are generally two parts of your insurance coverage: damage and injury to your property, and damage and injury to everyone else’s. Actually, for your own property, there are also two parts: collision and comprehensive. Collision is when your vehicle strikes something; comprehensive is everything else. If you run into a tree, your collision coverage (minus the deductible) pays for the damage to your vehicle. If a tree strikes your car because it fell on it, or a storm uprooted it, your comprehensive (again minus the deductible) pays for the damage to your vehicle.

As far as what coverage you take for your vehicles, you should consider your options as far as carrying insurance on them. Most people – and companies are just ‘people’ who spend someone else’s money instead of their own – either overpay or underbuy the insurance they need.

For example, if you run a business that does any kind of metal repairs, you can probably do your own body work on your vehicles. Therefore, you might not need to be carrying collision or comprehensive coverage. Or you might consider raising your deductible. Also look at how your insurance covers you: if you operate a taxi service, your insurance may not provide any coverage to you or your drivers unless they are at fault; if someone hits them and they’re injured or one of your cabs is damaged, your insurance may not cover it, they have to sue the other driver.

What you do want to look at are the most important part of your coverage, and the one that is most usually mandatory: public liability. In some states, all you’re required to carry is the state minimum, which might be as low as $15,000. This amount is so low as to be ridiculous. In fact, most common carriers are required to carry at least $5,000,000 in public liability per accident, and in some localities, if you do business with a government agency

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A fixed asset is typically a piece of kit purchased by a business that will be used by that business to generate a profit over a period of time, perhaps more than one year, as opposed to an item that is consumed within the financial year. Items in the category of fixed assets may be plant and machinery, fixtures and fittings, computers and vehicles.

For most fixed assets the capital tax allowance consists of an enhanced first year allowance in the year of purchase and writing down allowance in subsequent years. This type of tax allowance spreads the allowance of the amount spent over the life of the asset rather than that item being expensed in full in the year the purchase was made.

For small businesses the first year allowance is currently 50%, 2007-08 and in subsequent years the writing down allowance is 25% of the balance. Special rules apply to vehicles and of particular interest when preparing the taxi driver accounts. These special rules certainly affect taxi drivers many of whom will find they are not eligible to claim the 50% first year allowance on their taxi.

Vehicles, including taxis are generally excluded from the 50% first year allowance and may not be claimed in the taxi driver accounts. In addition the 25% writing down allowance is restricted to a maximum of 3,000 pounds p.a. The writing down allowance continues until the value of the vehicle is written off for tax purposes or is sold.

When a vehicle is sold if the vehicle is sold at a price below the written down value for tax purposes then an additional capital tax allowance can be claimed in the taxi driver accounts. The additional tax allowance is equal to the difference between the price at which the vehicle was sold and the net written down value for tax purposes. When a vehicle is sold at a price above the net written down value for tax purposes there is a deduction in the capital allowances which is called a balancing charge and is equal to the sales value less the written down value for tax purposes.

Commercial vehicles are treated differently to cars. First year allowances can be claimed against the purchase price of vans that are deemed to be commercial vehicles. The Inland Revenue website has a list of vans it deems to be a commercial vehicle and the make and model of any van thought by the owner to be a commercial vehicle should check that vehicle against the list when claiming a first year allowance.

The writing down allowance on commercial vehicles is not restricted to 3,000 pounds. Capital tax allowances on commercial vehicles is then the same as a typical piece of plant and machinery whereby a 50% first year allowance can be claimed in the first year with a 25% writing down allowance in subsequent years.

The capital allowances act 2001 makes a distinction between cars and qualifying hire cars. Cars are subject to the restrictions on capital tax allowances applied to vehicles while qualifying hire cars are not subject to these restrictions in a similar way to which qualifying vans, commercial vehicles are treated.

The definition of what constitutes a qualifying hire car as opposed to a car is crucial to taxi drivers when the taxi driver accounts are being prepared either by the taxi driver or the taxi accountant. Simply using a car solely as a taxi is not sufficient to avoid the capital allowance restrictions. Using a vehicle which is deemed to be a qualifying hire vehicle is sufficient to allow a first year allowance and unrestricted writing down allowances to be claimed in the taxi accounts

To comply with the definition of a qualifying hire car the vehicle must be of a type that is not commonly used as a private vehicle and would also be unsuitable for use as a private vehicle. Hackney carriages, black cabs and limousines fall into the category of a qualifying hire car and taxi drivers using these types of vehicle may claim the 50% first year allowance and the 25% writing down capital allowance in subsequent years in the taxi driver accounts.

Other vehicles used as taxis would not receive the first year allowance but would be subject to writing down allowance of 25% of the original cost in the first year and a further 25% in succeeding years all subject to a maximum of 3,000 pounds per vehicle per annum. In addition when preparing the taxi driver accounts taxi drivers should note that if the taxi is also used for personal use then a further deduction in tax allowances is applicable according to the percentage that the taxi is used for personal business.

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This article is a guide to the frequently asked questions about driving a minibus.

What is a minibus?

The classification for a minibus is a vehicle that has between 9 to 16 passenger seats. With more than16 passenger seats the vehicle is classed as a coach.

What is a Section 19 Minibus Permit?

If a minibus is being driven for hire or reward then a Passenger Carrying Vehicle (PCV) licence is required. Certain organisations such as volunteer groups, whose activities are beneficial to a community, can apply for a Section 19 Permit. This allows a small charge to be made to cover the vehicles operating costs without the need of a PCV licence.

A driver of a Section 19 permit minibus can either be a volunteer or be paid. If the minibus is being used as a non-profit bus service a Section 22 permit can be applied for. However with this permit the driver must be a unpaid volunteer.

Minibuses used by schools and educational establishment that do not charge their pupils do not normally require a Section 19 permit.

Section 19 permits are only valid within the UK.

Do minibus passengers have to wear seatbelts?

Seatbelts requirements for minibuses vary according to the age of the vehicle, passenger carrying capacity, type of passengers (i.e children or wheelchair users) and type of seat fitted. A general rule is that if a minibus is fitted with seatbelts then they must be worn.

It is compulsory for a minibus driver to wear a seatbelt.

What are the Driving Licence requirements for a minibus?

Driving licences issued after the 1st January 1997 require a category D1 classification, which can be obtained by applying to the DVLA and passing a Passenger Carrying Vehicle (PCV) test.

There are exemptions to this regulation that will allow a minibus to be driven with a full category B (car) licence, but the following conditions need to be met:

1. The minibus is used for a social purpose but not for hire and reward.

2. You must be over 21 and have held your Category B license for more than 2 years. If you are over 70 then you are required to meet the health standards for driving a D1 vehicle.

3. No payment can be accepted for driving the minibus.

4. The minibus cannot weigh more than 3.5 tonnes or 4.25 tonnes with special equipment for carrying disabled passengers.

5. Towing a trailer of any size is prohibited.

6. The minibus can only be driven in the UK. Driving in Europe will require a D1 licence.

What are the speed limits for driving a minibus?

Speed limits for a minibus on UK roads are:

30 mph in urban and residential areas

50 mph on A class (single-carriageway) roads

60 mph on dual-carriageway roads

70 mph on motorways

If the minibus is towing a trailer the speed limit on motorways is reduced to 60 mph and the fast lane cannot be used for overtaking.

Minibuses registered after 1st January 2005 must now be fitted for with a speed limiter, restricting their maximum speed to 62 mph.

What are the regulations for driving a minibus in Europe?

A ‘waybill’ or an ‘own account certificate’ must be carried regardless of whether the minibus is being used for hire or reward. The MinibusClub.co.uk has more information about these documents.

Other documents that need to accompany the vehicle include a minibus insurance certificate, European accident form and Vehicle Registration document. A specialist minibus insurance provider will be able to advise whether a Green Card is also needed.

When driving in Europe a GB sticker or EU style GB sticker must be prominently displayed on the minibus at all times.

More information about minibus driving regulations can be obtained from the Directgov website or the Minibus Club.

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