Tax & Legal Points
Legislation Governing Car Sharing
Section 1(4) of the 1981 Public Passenger Vehicles Act defines the rules that govern car sharing as follows: “the total of any charges should be agreed in advance and must not exceed the running costs (including wear and tear and depreciation) of the vehicle for the trip”. This is always the case on BlaBlaCar: our service is intended and has been designed for drivers to offset their running costs and not to make profit. BlaBlaCar automatically calculates a recommended price for every journey, ensuring that drivers do not receive reimbursement exceeding running costs, in complete compliance with legislation. The running costs used fully respect the Approved Mileage Payment Allowance, established by HM Revenue & Customs.
Insurance & Taxes for Drivers
All ABI motor insurers have agreed that if your passengers contribute towards your running costs your insurance cover will not be affected, as long as rides are given in a vehicle seating eight passengers or less (Source: ABI website, 2008). BlaBlaCar limits number of seats and prices, scrupulously fulfilling the above requirement regarding profit: drivers’ costs are only offset and no profit can be made. Drivers with any concern are also encouraged to check directly with their car insurer, as terms and conditions of individual car insurance providers may vary over time.
To offset their running costs, BlaBlaCar drivers do not receive payment in excess of HM Revenue & Customs Approved Mileage Payment Allowance, so no profit is made. When drivers do no more than covering running costs, and do not drive over 10,000 miles per annum, they make no taxable profits.