self employed driving instructor

rose11

My bf is training to be a driving instructor, hes got one more test to pass before he's fully qualified.He works for an agency teaching pupils, but we have to pay them money and also have to pay for the renting of car, insurance etc. His accountant said to get a business account which you have to pay commision etc if you have below a certain amount. Theres also of course the account to pay and petrol tax etc. We are just on the verge all the time of paying things, sometimes we go abit overdrawn which of course we have to pay for. What I hope someone can help with is, do you know of any grants etc or anything we can do especially being self employed, or just ideas of what to do or anything.. thanks

samr_2

Is he a member of any driving instructor forums. He might get some good advice there.
Try
http://www.drivertrainingtoday.co.uk/forum/index.php

rose11

Don't think he is. But thanks will have a look at that one and see if theres any more, thanks again. :beer:

Rolandtheroadie

Unfortunately it seems to be a career that has (almost) reached saturation point.
Once he's fully qualified, could he not go it alone? Lease hire a car? Buy one?
Perhaps the princes trust? Do they not offer assistance to people aged 19-29 that want to start a business?

Good luck.

jessicamb

Driving instruction is a saturated industry unfortunately (I have a relative who is one). You need to be working a lot of hours to make money - leasing a car on your own is cheaper than a franchise agreement but you will have to work on building your own client base. A lot of the costs are fixed though so you will probably find that a few extra hours is where you make most of the money. The adverts on the TV that promise £30k of income a year have you working more than full time hours and count only the income - forgetting that you have to pay out for a car, fuel etc.

I dont think you need a business account with fees - there shouldnt be that much going through the accounts to warrant a business account, I know my relative just has a current account used only for the business. If you are only operating a driving instruction operation you might also want to consider letting your accountant go and do the work yourself - its not that hard at all.

Oooh one piece of possibly useful advice on reflection - if you have a petrol car get a diesel as you should save on fuel costs.

Good luck

I dont think I can offer you any other advice other than to make sure that you are including all relevant allowable business costs in your tax calculations (but your account will have already told you that).

Scousebird_2

I have been both a driving school manager and an adviser for 3 major banks. If your partner is self employed, it is a legal requirement to have a business account for audit and tax purposes. So your hubby would need some sort of business account.

Instructing is a very saturated and difficult market at the moment and therefore, once your partner has passed his part 2-he will need to do the mandatory 'on road' training before he applies and sits his level 3 to move from his pink badge to green badge. He can start taking pupils on test on a pink badge but there is a real shortage of pupils. When you are on pink badge, you do not have an ADI number. You need to be sure pupils are ready for test as an ADI otherwise you risk the DSA taking your licence off you so make sure you don't rush your training and make the most of it.

jessicamb

Do you have any details about where the legal requirement to have a specific business account rather than just another current account? I believe the requirement is to keep good accounting records and any bank account can do that (though it is easier if you have a seperate account).

I did some googing and couldnt find anything - I did find this article though http://www.independent.co.uk/news/business/money-if-the-bank-says-youre-a-business-1144925.html

rose11

I've just read some of that article, is ok having a business account but only if you have got enough in the bank because then they don't charge commision etc, but what if like my bf you don't earn enough and most of it is going straight out for DD's etc we are paying for that, surely they should be charging people who have more in the bank? It doesn't help us with our money.

fengirl_2

There is no legal requirement to have a business account (unless you are a limited company), but its good practice to have a separate account for the business so you can keep everything separate. A number 2 account with your usual bank is fine.
Make sure you keep track of all of your own money you put in as this will be needed by your accountant.
Don't forget that if he makes a loss in his first year, this can be carried back to set against he pay from his previous job.

Quimby

I've had 2 separate bank accounts since starting as an instructor - 1 current account where I pay in all the income and take out all business expense (petrol, franchise fees etc) as well as paying myself a wage from it

I also have a reserve account - I scrupulously put 30% of my profit into it so I have the funds available for the tax bill - my accountant was surprised (but impressed) as he says most of his driving instructor clients don't prepare for this and can be hit with a bill for up to £6k, and don't have the cash available

I definitely recommend putting this cash aside and not touching it, in fact pretend you don't have it - this will save you a lot of stress later on when the taxman comes

Both accounts are with Abbey, who don't charge any fees for transactions, which definitely benefits a small business with not much cashflow. It does mean though that you pay in all cash & cheques in at the ATM, not at a branch, but I find that more convenient anyway, as I do all the other banking on t'internet