Taxi and Private Hire Driver Support Fund guidance
Information in this document is provided by the Scottish Government, in conjunction with the Convention of Scottish Local Authorities (COSLA), to Scottish local authorities.
On 9 December the Scottish Government announced a wide-ranging package of additional business support totalling £185 million, including a £19 million fund to assist eligible private hire and taxi drivers in Scotland with fixed costs, in addition to other funding for loss of income available through the UK and Scottish Governments, notably the Self-Employment Income Support Scheme and the COVID-19 Public Transport Mitigation Fund. On 18 January 2021 the Scottish Government announced this fund had been increased to a new total of £57 million.
This grant funding will be made available through powers conferred by Sections 126 and 127 of the Housing Grants, Construction and Regeneration Act 1996.
This document has no statutory basis, is offered without prejudice to relevant legislation and legal decisions, and does not constitute legal advice.
The document aims to inform a mutual understanding amongst local authority practitioners engaged in the administration of these grants. It includes specific information relating to the grants.
Given their responsibilities for managing public funds, it is up to local authorities to ensure that procedures for administering the grants are suitably robust, including due diligence to mitigate fraud and for audit purposes.
Local authorities are expected to seek recovery of overpayments including pressing criminal charges where necessary, if fraudulent claims are found. Councils will not be held financially liable for overpayments associated with fraud and error. The exception to this would be circumstances where a council is found to be materially not compliant with the relevant UK Government fraud control guidance.
How will the grants be provided?
Local authorities will administer the grants and will be responsible for delivering the funding to eligible and licensed private hire and taxi drivers. The Scottish Government will fund local authorities to make these payments.
Councils will write to all eligible driver licensees beginning in week commencing 18 January (or use social media or other effective forms of communication) to brief them on their potential entitlement and invite them to provide relevant supporting information and bank details. Councils will aim to make payments promptly and within a maximum four week period, from receipt of any and all relevant supporting information required, and where the eligibility criteria have all been met.
Payments will be made into a business bank account, where possible, or a personal account.
Local authorities are expected to offer an appeals process for applicants.
Due diligence, monitoring and reporting requirements
Local authorities are required to be assured of the validity of any supporting information requested in determining eligibility for a grant. The Scottish Government will require local authorities to regularly supply agreed management information each week, which will include the number of eligible driver licensees by category, grants processed and awards made or refused (with rationale) and the number and total of actual payments made.
Core eligibility criteria
To be eligible for this financial assistance taxi or private hire drivers must be licensed for the period 9 October 2020 to at least 31 January 2021; this excludes all drivers whose licenses were suspended on or before 31 December 2020, and that remains current and valid.
The applicant must confirm (self-certification) that up to 31 December 2020:
- they have experienced loss of income as a taxi or private hire driver (50% of turnover, compared with 2019) and incurred overhead costs and expenses
- they are or have been working or available for work as a taxi or private hire driver
Local authorities can request additional evidence to determine eligibility, using self-declaration where appropriate. Mandatory evidence of a valid and current taxi or private hire driver license will be held by the local authority and therefore not need further verification. Drivers must however provide bank account details, and appropriate additional evidence requested by the local authority.
Financial assistance will be paid, as a one-off grant of £1,500 for each individual licensed taxi or private hire driver.
Taxi drivers in receipt of state benefits payments (Universal Credit, Statutory Sick Pay, Employment and Support Allowance, Job Seekers’ Allowance, Income Support) are eligible.
Grant income received by an individual or business is taxable. Grants payable under the Taxi and Private Hire Driver Support Fund will need to be included as income in the tax return of the individual or business.
Only individuals or businesses that make an overall profit once grant income is included will be subject to tax.
Payments made under the first tranche of the Taxi and Private Hire Driver Support Fund will fall into the 2020/21 tax year. Unincorporated businesses will be taxed when they receive the grant income.
Any individual who received a grant through their status as an employed taxi or private hire driver (rather than self-employed) must register for Self Assessment and declare the grant as additional income received through their employment. Further information on registering for Self Assessment and completing a tax return is available.
Other eligibility criteria
The driver applying for support must also meet the following criteria and where necessary supply appropriate documentation to substantiate their eligibility.
The driver must not have breached wider COVID regulations/requirements prior to local restrictions.
The driver/business must not have connections to tax havens, as set out in the Coronavirus (Scotland) (No.2) Act 2020.
Applicants are required to declare all previous support received from UK or Scottish or Local Government support schemes to provide local authorities with the necessary information to ensure payments are made correctly and compliant with EC State Aid limits.
State Aid is a European Commission consideration of public assistance given to undertakings on a discretionary basis and having the potential to distort competition and affect trade between Member States of the European Union. An undertaking is defined as any entity, regardless of its legal status, which is engaged in economic (commercial/competitive) activity relating to a market in comparable goods or services. A grant reduces an undertaking’s current expenditure, and so can be regarded as State Aid.
On 19 March 2020, the European Commission announced a temporary framework to enable Member States to further support the economy in the COVID-19 outbreak.
This temporary framework allows aid to be granted to undertakings facing difficulty as a result of the COVID-19 outbreak, and extends the limit of support to €800,000 in the form of grants, repayable advances and tax or payments advantages.
The UK Government submitted a UK-wide umbrella scheme Covid-19 Temporary Framework for UK Authorities’ which was approved under the Temporary Framework allowing UK public authorities to grant aid as quickly and as flexibly as possible. Full details can be found in this guidance for local authorities and other public bodies which provides full details on this. Local authorities should ensure that the applicable conditions are met, including obtaining the information required for transparency reporting purposes.
Support under this framework should only offered to those that can demonstrate they were not in financial difficulty on 31 December 2019. Councils must therefore ensure they hold this information from grants applicants. See paragraph 18 of regulation (EU) No 651/20144 of 17 June 2014 for the definition of a “firm in difficulty”.
The Temporary Framework covers aid granted until 31 December 2020 and should continue to be a valid consideration for now.