back to article Congestion charge dodgers register Bentleys as minicabs

Owners of upmarket sets of wheels have discovered a cunning ruse to avoid paying London's congestion charge - simply register the car as a minicab. According to the Times, Transport for London (TfL) is "particularly suspicious" that a large number of exotic motors and two-seater sports car owners have coughed the £82 application …

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Minicab?

Whilst I agree with the Merc SL & Aston being unlikley Minicabs, I can see Mabachs and Bentlys being used by upmarket hotels and airlines for Heathrow transfers. There are lots of companys that use Bentlys (esp wedding to honeymoon ariport stuff). TfL need to stop moaning, plug the loophole, and get on with it, but not whilst taxing minicab ferms for being upmarket. That or do the right thing, and scrap the whole system.

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Pirate

Ban the congestion charge

Bring in a stupid tax and everyone will try to avoid it. I would bet the people that are squealing about the avoidance are from the group that complained about the poll tax

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Unhappy

I think it was Adam Smith...

... or some other economist, or possibly DeTocqeuville, who predicted this sort of situation by saying that - paraphrasing - the more regulation and tax you burden people with, teh more likely they are to try and find a way around it.

Progressive tax regimes always end up punishing the people they claim to be put in place to help; the poor. This is because they give the people in the top brackets a disproportionate incentive - compared to a flat tax - to reduce their apparent income in order to qualify for lower tax brackets. There's also the law of unintended consequences kicking in, with so many regulations, exemptions and other such things that the government doesn't actually know what affects which, and you end up with situations where it's possible to avoid taxes by using other arms of the government against itself.

And that's all this congestion charge ultimately is: a tax. And not a very new one either. Back when London still had walls they charged a toll to go through the gates. Didn't matter which way you went, in or out, you had to pay the toll. The congestion charge is just a modern toll with more high-tech gates. Hardly the brave new future, is it? Reverting to the 15th century?

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School run?!?!?!

Why the F**K are the GREEN brigade encouraging the school run like this?! I am sick and f**king tired of people whingeing on about how they can't afford to drive their little darlings to school for every reason under the damn sun. There are myriad reasons why schools runs are a Bad Thing (TM) and only a very few, selfish, reasons why they should be supported. If you want to bestow a child upon the world it is your responsibility to ensure not only that they get to school so they can get an education but to do it in a safe and responsible manner. Part of that responsibility lies in making sure there is actually a world left for them to live in in 50 years time. If that means taking mornings off work to walk them to school and abandon your Chelsea tractor on the drive (probably actually on the street) then that is a choice you make when you have a child.

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A whole new meaning to private hire

I doubt it will matter what Tfl do here, as yes ok, they might stop some of the more ridiculous cars, but, what's to stop groups of people banding together and running private, private hire for the school run, got three families with big cars taking the nipper to school, well then, register them all as private hire cars under a shell company, "Notting Grove School Cars" that specializes in delivering your child safely to the school gates. Register each school run as a journey, and your trip to Waitrose, lots of people use taxi's to do that in London.

I think asking to see the vehicle insurance might be a bit more fun, as mini-cab driving is excluded on most normal policies, but then again, it's probably cheaper than £25 a day, in fact £8 a day to insure yourself as a mini-cab.

£25 a day sounds great as a way of making people downsize their cars, but the practicalities are that it now makes it more beneficial to find ways round the charge. Aren't vehicles with more a certain number of seats exempt anyway, Defender Safari's were at one point.

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Anonymous Coward

Have I missed something here ?

The website's Jay Nagley said: "The congestion charge is presented as an environmental measure, yet exceptions are being granted to some of the highest-polluting vehicles on the road.

No, I think the reason for the congestion charge is hidden in it's title. er..... to cut congestion ?

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Greedy bastards

Thay they can afford posh cars, but don't want to pay is disgusting. Come the revolution I hope they'll be first up against a wall.

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so they screwed up

and to save face, the people who caught TfL out on their on rules are going to be punished?

What should happen here is somone should get a slap ane the rules change for all applications from here on in.

Scapegoat: People who are smarter than the government.

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Taxi!

I always fancied registering my car as a cab so I could use the bus lanes. And cut everyone else up. Now there's another good reason.

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Rob

RE: School run?!?!?!

They only have kids as it's a human right (apparently) so whether they care about them or not, they want to excercise they're rights. Hence why we have a bunch of uneducated CHAVS and a bunch of educated lazy rich twats that make me want to leave this country as that's the generation that's got to look after us when we're OAP's.

(feel free to cry in public, it's a sorry state of affairs, no one will blame you)

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Anonymous Coward

Abuse of taxi status

Abuse of traffic rule exemptions granted to taxis has been around for some time. Cheapie airline supremo Michael O'Leary copped on to this several years. He (allegedly?) sourced a set of taxi plates for his Merc in order to avail of Dublin's bus lanes.

en.wikipedia.org/wiki/Michael_O'Leary_(Ryanair)

No doubt not the first - and unlikely to be the last.

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The congestion charge is a wonderful thing

Good old Red Ken, always thinking about the proletariat. His brilliant idea with the congestion charge is to overload public transport so that the affluent middle class can drive around with greater ease. I was delighted to read in his propaganda paper recently that "before the congestion charge and related increase in bus frequency, passengers often had to wait as two or three full buses streamed past without stopping." I got to that sentence just as the third full-to-bursting 55 streamed past without stopping. Progress, comrades!

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Er, isn't this a no-brainer to fix?

Just cross-reference all registered minicabs against those cars which actually have insurance policies covering hire-and-reward, which is a far more significant cost than a minicab licence, and is not included in standard domestic policies.

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Loophole fun

Good luck to them - TfL doesn't check that a minicab is actually being used as such? That's their own fault. Even if you were in a low charge car - £100 for minicab application+ first years registration is about 13 trips into the zone - with no worries about having to remember to pay it. 2 trips a month and it's paid for itself handsomely even at £8 a time!

"I think asking to see the vehicle insurance might be a bit more fun, as mini-cab driving is excluded on most normal policies, but then again, it's probably cheaper than £25 a day, in fact £8 a day to insure yourself as a mini-cab."

This sounds like a check which could be easily implemented and wouldn't affect anyone who was actually running a legit minicab service. So of course it won't be a consideration, instead a complicated, expensive, difficult to comply with system will be introduced instead.

And the congestion charge was always designed to be "green" albeit on a large scale where less cars = less fumes.

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@ supermeerkat

One can only assume given the tone of your triade that you can't afford to buy a "posh" car, but that you DO want to pay £25/£8 per day. I think it's disgusting you haven't worked harder to afford a "posher" car, but I digress...

Bravo to those who found a loophole, if TfL are too stupid to understand their own rules who's fault is that?

Come the revolution I'll be the one in the challenger tank shooting wildly into gangs of marauding hippes, with a big smile on my face, shouting "have a wash", "get a job" and "Take that you hippie bastards".....

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Fraud

or not?

If you can afford to run a Merc SL (or is it a company car for some city banker*) you can afford a lawyer.

Which means its not fraud.

* the old Lahndan Tarn rhyming slang, guv.

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Nothing new... Ryanair taxi anyone

This is nothing new, I remember a while ago reading that Ryanair CEO had is car registred as "taxi" to be able to use the taxi lane and beat the congestion...

I suspect that all those poor Aston & Bentley owners are too poor to afford the charges... or might just be that being greedy is the best way to get rich. Can't really answer it being poor and generous!

Lets hope TfL will check how much those people earns of their "minicab" services adn charge them an hefty fine.

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Unhappy

livingstone is a disgrace

why anyone allowed 70;s dinosaur red ken to be mayor of london is beyond me, is our capital city really so full of PC dungaree wearing fagasexuals that they actually embrace that commie twat, someone should throw him in the tower and scrap the congestion charge and any other rule he brought in

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The rich avoid taxes whatever happens

As long as taxes cost more than an accountant can save on tax dodges, the rich will avoid taxes. What the problem is isn't progressive taxes but the loopholes and offsets. Get rid of them.

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Stop

Title

"what's to stop groups of people banding together and running private, private hire for the school run, got three families with big cars taking the nipper to school, well then, register them all as private hire cars under a shell company, "Notting Grove School Cars" that specializes in delivering your child safely to the school gates. Register each school run as a journey, and your trip to Waitrose"

I guess the £2,410 total fee for the grant of an Operators License (required by all mini-cab companies) plus the £298 (plus about £80 for a medical) the License required by each driver plus each driver would have to pass the Medical, Criminal Record Bureau check and Topographical (knowledge) test. Not to mention the cost keeping track of all the paperwork in order to comply with the Operators License (although there are several companies offering nice expensive IT systems to help with this).

I would also like to add it's not just the Mayfair set are doing this, I regularly see a blue Toyata pick-up truck with license stickers.

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Happy

@andy Re: Taxi!

RyanAir's O'Leary has already done that... so he doesn't have to be stuck in Dublin traffic like all the other eejits. :-)

Personally I find that very amusing. TfL caught out by its own rules. And what's wrong with being picked up from home by a Maybach 62 to be driven to Kensington, or Fortnum & Mason for a spot of shopping? I mean really. It's cheaper than having your own limo on standby 24/7.

Rich people became rich by being shrewd and thrifty. Just because they now have Bentleys and Maybachs does not mean they won't continue to be thrifty where they can (like saving £25/day in congestion charge). A penny saved is a penny earned, didn't your mother teach you anything?

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Anonymous Coward

Breaking the rules, or simply a loophole?

Do TfL's rules state that the car *must actually be used* as a minicab to avoid the charge, or simply registered as one?

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@AC "livingstone is a disgrace"

You wonder how Red Ken was "allowed" to run London: he was elected fair and square. Do you have a problem with democracy? Or are you in favour of it only when it's the "right kind" of democracy? Is that why you're posting anon?

I sure as hell think he's a much better bet as mayor than toff Boris, hope he never gets in...

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Just goes to show...

the more money you have, the easier it is for you to work the system.

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Pirate

OK, Congestion Charge Dodge No. 372

Ok so you have registered your Bently Battleship and your Chelsea tractor mumtruck as a minicab and so its going to cost you less than £100 for a year, or less than a weeks worth of congestion charge.

So Tfl is going to contact the owner and see what minicab company the car is used with.

Simple. For £250 you can set up and register a company with companies house. Thats just two weeks congestion charge. Now you transfer the ownership of the vehicle to the mincab company you have just set up and bob is your uncle. All you have to do is get an operating licence from the local authority and away you go. I am sure your driver has the nessesery qualifications to qualify as a licenced minicab driver. The best bit is that this is usually a one off charge so next year the costs will be even lower.

Because both your Bentley Battleship and Chelsea tractor mumtruck are now a fleet cars you can claim the VAT back on the fuel you use as it is bought by the minicab company and is a business expence. Your driver is now an employee of the minicab company. They are probably even down as managing director or something. You can even write of the cost of his wage, fuel, maintenance, licencing fees against any tax liabilities and small business tax breaks as the minicab company will run at a loss and end up being a tax loop hole, obviously.

If you are a particularily tight bastard you can even claim back "taxi" the fairs you charge yourself to drive yourself to work as a company expence so you end up not actually paying for your car at all and you might even turn a tidy profit.

Your kids are down as regular customers and your nanny's salary is split between the "housekeeping" budget and the minicab company as she spends at least four hours of her 8 hour working day crawling through London rush hour traffic dropping the kids off and picking them up from school

I am pretty sure I am not the first to think of this and the number of mincab companies springing up in Chelsea, Mayfair and Kensington have just gone through the roof.

Its a slightly different spin on registering your company toff tank as a company car and using it as a tax break.

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Upmarket

For those who can't be bothered to look it up themselves (and because I didn't know either), it looks like a Maybach is the Merc equivalent of Toyota's Lexus brand (as seen on BBC cop shows).

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Go

@Peter Tynan

Remember that that total fee is mostly one-off. After the initial spend, it's only the renewal fees for the drivers every year.

Also, bear in mind that £25 per day = £9,125 per year, so it's a £6,700 saving before you start, and that's per person! If three people club together for example...

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FAO Peter Tynan

Its just a question of economy of scale.

If enough people did it it would be cheaper than the £8 or £25 a day.

I drive my car every day of the week and it would cost me £9k a year just to drive my car ? sod that for a bloody game of soldiers. Even if it cost me £3k then ive saved moeny.

I agree with the tank guy above, I will be i another tank nearby also running over green nutters and to be nice and green, i will shoot them with recycled bullets :)

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Go

Just give the names and addresses to HMRC

HMRC are good at "presuming" how much income a minicab should be generating, and charging income tax on it. And indeed, the milometer ought to provide enough evidence of the distance covered, and the minimum reasonable charge applied to their passenger at x pounds per mile.

These people will all be in the high rate (should that be i-rate) tax band, and the minimum reasonable charge for hiring such a high class vehicle will be quite high, so they will have to keep the vehicle pretty much off the road if they don't want their income tax to exceed the daily congestion charge.

Problem solved, I think ... ???

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Black Helicopters

Re. "livingstone [sic] is a disgrace"

"why anyone allowed 70;s dinosaur red ken to be mayor of london is beyond me, is our capital city really so full of PC dungaree wearing fagasexuals that they actually embrace that commie twat, someone should throw him in the tower and scrap the congestion charge and any other rule he brought in"

It's a little thing called democracy... you know, where people get a chance to vote on who will run things? OK, so Ken himself has used the old maxim "If voting changed anything they'd abolish it" but even so a majority of people expressed a preference for the man as mayor.

By the sounds of your post you really should try taking it easy, you'll give yourself a coronary. Or organise a fasicist coup. Could go either way really.

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Mars

AICMFP

"is our capital city really so full of PC dungaree wearing fagasexuals that they actually embrace that commie twat"

You are Jim Davidson and I claim my five pounds.

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@Brian Squibb

I'm all in favour of a stupid tax. Trouble is that too many council and government folk would be severely penalised by a tax on stupidity...

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Simple Answer

There's a very simple solution for TFL if they want to put a stop to this; make cabs pay the congestion charge. If its no longer about congestion but about the environment instead (never mind that its really about taxing the middle classes - I digress), then why should cabs be exempt? Cabs will simply pass on the congestion charge across customers and it will also encourage them to get greener cabs. Of course the fact that the Hackney Cab lobby is pretty powerful and Ken wouldn't like them bitching at him as he swans around London on the public purse is completely irrelevant. People getting taxis will pay a bit more, but so what? Everyone else is paying more tax, why shouldn't they?

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Paris Hilton

The "taxi" plate dodge doesn't work...

It wasn't so long ago that minicabs in London weren't regulated at all (the Local Government Act 1971 applied everywhere in England & Wales except London). And a minicab is not a private hire car or a taxi - in fact, it's a criminal offence to display a "taxi" sign on a car if it isn't registered as a Hackney carriage, and the driver doesn't hold a Hackney carriage licence.

The word "taxi" is actually an abbreviation for "taximeter carriage", so all taxis must, to get the licence, have a taximeter. It's therefore great to know that some people are displaying "taxi" signs as a dodge, whether or not they have a Hackney licence - because they have no chance of making it work. If they (the driver or the car) don't really have a Hackney licence, then the driver gets a criminal record: if they do, then just try to flag them down in the street sometime, as only Hackney carriages can be hailed in this way. If the meter never runs, the scam is revealed when the car and taximeter has its annual check by the local authority: if the meter displays "For hire" when driven, and the driver doesn't stop to pick up anyone hailing them in the street in the area for which they're licensed, they get the Hackney plates taken away anyway.

So come on, El Reg readers, get scambusting!

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Anonymous Coward

re Greedy bastards

I doubt very much that this practice is limited to the "Greedy bastards" in the previous comment. They just happen to drive cars that appear out of place on the list. Besides, it makes much more interesting reading if you can get the words "fat cats" into your article.I would be interested to see how many people carriers / family cars are using this loophole.

Anecdotal evidence suggests that people have started carrying medical equipment around as that entitles them to be classed as ambulances and thereby avoid charging and buss-lane rules. Whether it is true or not I don't know.

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Happy

Crosschecking mini cab firms records ...

...will have the useful side effect of wiping out all the ones without private hire insurance, driver's without licenses or worse still, drivers illegally in the country who have never taken a test anywhere.

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Coat

Company Cars as Private hire

Next time you look at a huge Bently with El Director sitting in the back think about the tax being paid on that company car... er, none! As he is being chaufered across town the car is classed as a pool car, so no company car tax to be paid. As the vehicle is also ordered in advance it could be classed as a private hire vehicle as well, hence mini-cab congestion charge?

There are so many dodges you can throw in if you have enough dosh (the savings on company car tax alone would pay the drivers wage I expect!) this is just another tax dodge in a long line.

El Director has better things to do than use an expenses form to avoid tax like the rest of us, everything is automatic tax avoidance if you are rich enough!

Pass me the offshore account book for the taxi fare...

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@AICMFP

Keith Turner, that's the best post I've seen here in a month.

Virtual pint on me.

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Anonymous Coward

Bus lane

And for the truly rich and famous.... register as a bus, that way you can use the bus lanes and avoid the queues.

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Happy

well.....

.... makes me glad I don't live in London really....

</rule 8>

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ian
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Why are taxis exempt anyway

If there is one person in a car driving himself across town, he's congestion. But if that same person hails an taxi that's been driving around empty causing more congestion, and gets in it, then that's public transport. Yet the taxi is causing more congestion (due to driving around all the time, partially empty) and more pollution (due to driving around all the time, and not going to its destination and parking). Taxis should pay more congestion charge, not less.

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Happy

@Loophole Fun

Did I understood you correctly? Minicabs aren't covered by most normal insurance policies?

Oh, I like that. Crash your £300'000 limo after being so clever with loopholes and next loophole user is your car insurance company.

"Sorry sir, we can't pay as your minicab wasn't covered..."

There is always a loophole. Insurance forms are second only to M$ software licenses.

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@Finn

The clause in question is "hire-and-reward." Most domestic hire policies specifically deny cover while the vehicle is being used for hire-and-reward (so the bint with a 7-seat XC90 ferrying six snot-nosed Huberts to the Montessori had better not be getting any more than petrol money from the other mummies freed up to frig themselves off to Trisha).

However the exception applies to usage, not registration. Any minicab driver would be entitled make personal use of his car outside his working hours, for instance, at which point it might still be registered as a minicab but it's not being used for hire and reward. Incidentally a chauffeur should certainly have the appropriate insurance depending on whether he's coming from an agency or privately hired by the vehicle's owner.

So if Bufton Q. Pigopolist smacks his domestic-insured, minicab-registered Arnage into the side of a bus, his insurer will be happy to pay up as long as he wasn't carrying paying passengers. On the other hand I'm sure TfL would be intrigued to find out he was violating the terms of his licence by being improperly insured for hire.

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