self employed taxi driver.

joanne_d_3

After loosing his job i nsept 09 my husband has been unable to find a new job.

Because of this and because he already holds a taxi licence anyway , hes decided to go self employed.
in saying this , hes going to be working from a depot and at the minute because its a little quiet , the owner of the depot only needs his to work for 2 days per week.

Im planning on having a go at his book keeping for him and i understand that i need to keep a record of everything earned and everything purchased for the purpose of his job

So......i know i can include :

Car repairs
perol costs
road tax
taxi insurance
valeting....

But what i dont understand is how to work it out owing to the fact that he only works 2 days?

I know i wouldnt be able to claim the full cost of major things like taxi insurance etc so who works it all out?

When its time to do the self assesment will i have to do the sums or will that be down to HMRC ?

Sorry if this is a daft question , i have just never done this before

Thanks

joanne d

Murdina

I assume he owns the vehicle he uses or else pays all the costs?

You need to get him to keep a record of mileage so that you know how many miles a week he does for business and how many private. You need ideally to keep this record all the time. Based on this, you split things like insurance, repairs and so on eg if he does 20,000 miles a year and 18,000 are business then you claim 18,000/20,0000 or 90% against tax.

Similarly with phone & so on - you have to take an informed view you can back up as to how far business and how far private.

The fact he only works 2 days a week is therefore not really in point - it's the business miles that count.

Self assessment is what it says on the tin. You have to do it yourself or pay an accountant. The self assessment guide HMRC produces is good though so read it through carefully.

Incidentally, have you registered him with HMRC as self employed & have you started to pay class 2 NIC? If not, go on line and do asap.

PlutoinCapricorn

It is important to keep good records, as HMRC know very well that there is scope here for being paid in cash so may decide to investigate.

https://www.businesslink.gov.uk is always the place to start, and the following may be useful too:

https://www.taxiregister.com
https://www.submityourarticle.com/articles/Terry-Cartwright-2388/taxi-22018.php

joanne_d_3

Thanks for the responses guys and the links made interesting reading.

Plutoincapricorn , dont worry , everything will be "above board" so HMRC will be more than welcome to look into our accounts at any time they like.

Joanne

PlutoinCapricorn

Will you be able to make the official start date some time after April 5th? People are entitled to warm up, test the water, do some marketing etc. before registering.

If you can do this, the first tax return will be for FY 2010/11 and due between April 2011 and January 31st 2012, which gives you plenty of time to learn about expenses that can be claimed legitimately.

joanne_d_3

PlutoinCapricorn wrote: »

Will you be able to make the official start date some time after April 5th? People are entitled to warm up, test the water, do some marketing etc. before registering.

If you can do this, the first tax return will be for FY 2010/11 and due between April 2011 and January 31st 2012, which gives you plenty of time to learn about expenses that can be claimed legitimately.

Nope . this start date wont be possible .

As i say , EVERYTHING that my husband does as a self employed taxi driver will be done to the letter !!

He started on 12th March and i have already declared him as self employed with HMRC . We (he) is going through an employment tribunal with his ex employer and they are not being the most "fair" of ex employers so......he started on 12th March and has already been registered as such............i saw it as "I WILL INFORM HMRC BEFORE THE EX EMPLOYER DOES" LOL

In saying this , i fully understand there is a 3 month "grace" period in letting the HMRC know but we just felt better knowing they had been informed right from the beginning.

Thanks for the responses.

joanne

joanne_d_3

Pluto

Do you speak from HMRC experience or accountancy experience?

Im thinking maybe i would be better to leave this to an experience accountant?

I dont wana get it wrong....

PlutoinCapricorn

It occurred to me that as we are close to the end of the 2009/10 tax year, it is worth bearing in mind that when you register as a sole trader, you need to give a start date, which is the day that you start trading/working for real. HMRC don't want people to register in advance just because they are doing something as a hobby or have had a good idea or hope to make money some time maybe, they want people to have actually started work.

This point has been mentioned before around this time of year. If you want to go by the book then the official start date is when the first customer was driven I suppose. But talking about possibilities is not officially working. You can still offset expenses incurred before the official start date against income, as HMRC know that you need to buy things before you can start looking for customers.

calebdylan

September the month which starts the recession many loosed their jobs you can avail some benefits since your self employed