Taxis and Vat please help

DUNTAXI · 21 February 2008 at 12:14AM

The local Council's in England and Wales regulate the taxis under the office of Public Protection and set a rate for the customer to pay so they do not get ripped off.
This metered rate applies to all taxis in each council area and does not distinguish between vat registered or non vat registered taxis .
If the fare was to include vat on the tariff then the non registered taxis would be charging vat to customers when they are not allowed to by the cuatoms and excise and would be prosecuted for doing so.There is no way they would charge 17.5% less than the meter rate.

The vat guide states

1.2 What is liable to VAT?

The fares you charge to your passengers for taxi or private hire journeys are liable to VAT at the standard rate.

It also states
Where your charges are VAT inclusive...........................

so what about where they are not ????????????????/

DUNTAXI · 23 February 2008 at 6:12PM

What is VAT?

VAT is a tax on consumer expenditure. It is collected on business transactions, imports and acquisitions.
Most business transactions involve supplies of goods or services. VAT is payable if they are:

supplies made in the United Kingdom (UK) or the Isle of Man
by a taxable person
in the course of a business
are not specifically exempted or zero-rated.

6.1.2 When must I register and start to charge VAT?
If the value of your taxable supplies is over a specified limit, you must register for VAT, unless your taxable supplies are wholly or mainly zero-rated in which case you may apply for exemption from registration. The limits are shown in the supplement to Notice 700/1 Should I be registered for VAT?
If you are registered for VAT, you must charge and account for VAT on all your taxable supplies from the date that you are first registered.

What happens after I’ve registered?

You need to charge VAT on all your taxable supplies from your date of registration

Miketaxis · 4 October 2008 at 11:17AM

Just in the process of working up to a full and frank discussion with my VAT Inspector. She has the opinion that the company is acting as a principal for all the self employed drivers and that I should pay VAT on the total takings not just the rental we get from them.

Any experience, success otherwise just send money?

Anyone else interested in campaigning to put taxis on a level playing field with buses and trains by zero rating VAT and subsidising fuel?

Mike

longforgotten · 4 October 2008 at 4:30PM

I understand that once a person is vat registered if they start another business in their name then that business will also need to be included on the vat return.

However if someone has two businesses both of which are under the threshold then there is no need to register for vat. Surely then if a person decided at the start to run two businesses, one say local taxi services and the other school runs, airport runs, then it maybe possible to get around the vat threshold. Obviously the correct paperwork would have to be completed, the one company recharging the other for use of vehicles etc, it will be necessary to show them as separate businesses. It could be done.

It is not possible to split a business once you hit the threshold as it will obviously be seen as avoiding paying VAT.

longforgotten · 5 October 2008 at 5:48PM

Iglite, I agree with you totally...

As with many aspects of VAT, a wide range of issues need to be considered before reaching a decision as to whether an arrangement produces one or two businesses from a VAT point of view. It is often not a clear-cut situation, and the lost Tribunal cases show that Customs are not always correct in their interpretation of the law. But planning in advance is the key – rather than waiting for the dreaded knock at the door by the VAT man!

Unfortunately there are alot of questions that someone needs to ask before they even start trading , and that's for just one company!!!

Taxis and Vat please help

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