Coronavirus (COVID-19): Taxi and Private Hire Driver Support Fund - information for local authorities

Taxi and Private Hire Vehicle Driver and Operator Support Fund

Overview

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 2 June 2021 the Scottish Government announced a £62 million fund to assist eligible taxi or private hire drivers and private hire and taxi licence holders in Scotland with fixed costs.

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 for 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 the grants will be provided

Local authorities will administer the grants and will be responsible for delivering the funding to eligible taxi and private hire drivers and private hire and taxi vehicle licence holders (operators). The Scottish Government will fund local authorities to make these payments.

For the driver element

For the driver element local authorities will make a payment of a further £1,500 to all drivers who previously received a grant under the Taxi and Private Hire Driver Support Fund.

Local authorities will aim to make payment in week commencing 7 June 2021, subject to receiving any relevant supporting information required, including the claimants National Insurance number, and where the eligibility criteria is met.

Payments will be made into a business bank account, where possible, and personal accounts.

For the operator element

Local authorities will contact all eligible vehicle licence holders in June (or use social media or other effective forms of communication applicable to the sector) to brief them on their potential entitlement and invite them to provide relevant supporting information and bank details.  Local authorities will aim to make payments promptly within a maximum four week period, subject to receiving any relevant supporting information required, and where the eligibility criteria have all been met.  Application forms for operator grant support must be returned to the local authority by close of play on 23 July 2021.

Payments will be made into a business bank account, where possible, and personal accounts.

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 every two weeks, which will include the number of eligible vehicle licencees by category, grants processed and awards made or refused (with rationale) and the number and total value of actual payments made.

Local authorities are expected to offer an appeals process for applicants.

Core eligibility criteria 

For the driver element

The core criteria for the Coronavirus (COVID-19): Taxi and Private Hire Driver Support Fund was as follows:

• a taxi or private hire driver;  holding a valid licence for the period 9 October 2020 to at least 31 January 2021;
• are or have been working or available for work as a taxi or private hire driver;
• experienced loss of income (50% of turnover, compared with 2019) and incurred overhead costs and expenses.

For the driver element of the Taxi and Private Hire Driver and Operator Support Fund –  2021-22, a one-off grant of £1,500 is payable based on the following criteria:

• the driver must have previously received a grant from the Taxi and Private Hire Driver Support Fund earlier in 2021;
• their local authority taxi or private hire driver licence must remain current and valid as at 3 June 2021.

All eligible drivers will therefore have received grants totalling £3,000 from the Scottish Government

For the operator element

For the operator element of the Taxi and Private Hire Driver and Operator Support Fund –  2021-22 eligibility is based on the following criteria:

• an individual or company holding a valid taxi or private hire vehicle licence as at 3 June 2021; one claim per vehicle, generally and in particular where a licence is held jointly by a number of individuals and
• the operator must have experienced loss of income (50% of turnover, compared with 2019) and incurred overhead costs and expenses (confirmed by self-certification)

If a license is pending transition to another named licensee on 3rd June the local authority should pay the newly named licensee holder the payment rather than the historic holder.

If a taxi or private hire car driver has a renewal application in respect of their previous licence pending as at 3rd June, the local authority should consider that the driver continues to be validly licensed in the meantime and a payment of £1,500 should be paid.

An individual or company holding a taxi or private hire vehicle licence awarded in principle with no vehicles attached is not eligible for the operator grant.

Eligibility for this financial assistance will be based on the local authority taxi and private hire vehicle licensing regime, with local authorities inviting eligible owner operators to verify a claim.

Grant rates

The Taxi and Private Hire Driver and Operator Support Fund –  2021-22 assumes that local authorities will making separate payments to eligible drivers and operators, based on the distinct criteria set out above, and capped by each individual local authority at £10,000 in total for both elements,  with the exception of owner/operators with fifty or more vehicles.

For the driver element

Payments to eligible licenced drivers will be at a flat rate of £1,500.  If a driver is eligible and claims both payments, they will have received a total of £3,000. 

For the operator element

For the operator element of the Taxi and Private Hire Driver and Operator Support Fund –  2021-22 eligibility is based on the following criteria:

• a company, partnership, sole trader or trust holding a valid taxi or private hire vehicle licence as at 3 June 2021; one claim per vehicle, generally and in particular where a licence is held jointly by a number of individuals; and
• The operator ( company, partnership, sole trader or trust) must have experienced loss of income (50% of turnover, compared with 2019) and incurred overhead costs and expenses (confirmed by self-certification).

If a taxi or private hire car driver has a renewal application in respect of their previous licence pending as at 3rd June, the local authority should consider that the driver continues to be validly licenced in the meantime and a payment of £1,500 should be paid.

A company, partnership, sole trader or trust holding a taxi or private hire vehicle licence awarded in principle with no vehicles attached is not eligible for the operator grant.

Eligibility for this financial assistance will be based on the local authority taxi and private hire vehicle licensing regime, with local authorities inviting eligible vehicle licence holders (operators) to verify a claim.

Grant rates 

The Taxi and Private Hire Driver and Operator Support Fund – 2021-22 assumes that local authorities will making separate payments to eligible drivers and operators, based on the distinct criteria set out above, and capped by each individual local authority at £10,000 in total for both elements (with the exception of owner/operators with fifty or more vehicles). 

For the driver element

Payments to eligible licenced drivers will be at a flat rate of £1,500.  If a driver is eligible and claims both payments, they will have received a total of £3,000.

For the operator element

Amounts payable will be differentiated and scaled, with a base grant payable to owner-operators with one vehicle, and higher grants for those operators holding multiple vehicle licences.

The grant is payable based on the number of vehicle licences each company, partnership, sole trader or trust (operator) holds, as follows.

• one vehicle  - a single award of £1,000
• two to nine vehicles - a single award of £3,000 for all vehicle eligibility
• ten to forty-nine vehicles - a single award of £7,000 for all vehicle eligibility
• fifty or more vehicles - a single award of £15,000 for all vehicle eligibility

Only one claim can be made per vehicle licence.  While directors of limited companies, partnerships and trusts that are a named taxi and private hire vehicle licence holder are eligible to receive financial support through this fund, employees of limited companies, partnerships and trusts are not eligible. 

Where a vehicle licence is held jointly by more than one individual, the claimant should have the agreed authority of these individuals to claim the grant (confirmed by self-verification).

Local authorities can request additional evidence from operators to determine eligibility.

Those who operate across multiple local authorities are eligible for one grant from each local authority for the licences granted by that local authority.

Provided they meet all the eligibility criteria, owners which are Limited Companies (including social enterprises), Sole Traders, Trusts, and Partnerships are eligible. Community Interest Companies or Scottish Charitable Incorporated Organisations, may also be eligible.  Supporting documentation may be requested to verify separate business entities.

Other eligibility criteria 

Both taxi and private hire drivers and taxis and private hire vehicle licence holders (operators) applying for support must also meet the following criteria and where necessary supply appropriate documentation to substantiate each.

• they must not have breached wider COVID regulations/requirements;
• they must not have connections to tax havens, as set out in the Coronavirus (Scotland) (No.2) Act 2020.
• applicants may be 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/UK Government subsidy control policies.

Taxi and Private Hire Driver and Operator Support Fund – tax implications

Grant income received by an individual or business is taxable. Grants payable under the Taxi and Private Hire Driver and Operator 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 will fall into the 2021/22 tax year (whereas payments made under the first tranche of the Taxi and Private Hire Driver fund will fall into the 2020/21 tax year).  Unincorporated businesses will be taxed when they receive the grant income.

For the driver element, any individual who is eligible for and receives 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.  

Taxi and Private Hire Driver and Operator Support Fund – tnteraction with benefit entitlements

Grant income through the Taxi and Private Hire Driver and Operator Support will be regarded as capital by the Department for Work and Pensions.

Recipients of the Taxi and Private Hire Driver and Operator Support who are also in receipt of working age benefits must declare the grant to the Department of Work and Pensions in order to have it taken into account when calculating their benefit entitlements.