self employed

scooby088

just a question here, i'm considering going self employed what can i claim back when it comes to insurance of veichles, fuelling of veichles,

fengirl_2

You cannot claim anything back from anywhere. You need to keep complete and full records of all your expenditure in connection with the business howe ver and this will reduce your tax bill. If the item was bought in order to earn your income, then it needs to be included.
For the use of a personal car, you can either include 40p pm for the first 10,000 miles and 25p pm thereafter. Or you can include all the running costs of the vehicle and then add back the privtae proportion in your self assessment. If using this method, you can also claim capital allowances on the vehicle. If you are VAt registered you need to use this method.

joanne_d_3

Hi Fengirl.

you seem really good with tax matters , would you mind if i asked you a few questions?

1- my husband has just started as a self employed taxi driver. We plan to allow for vehicle runnning costs as oppossed to mileage allowance. With this in mind could you tell me (i think i already know the answer so sorry if its a daft question) if for example hubbies total earnings for the year is £10,000 and fuel/running costs is £2,000 do we deduct the £2k from the £10k and pay tax ONLY on the remaining £8k?


2- taxi insurance has really got me stumped lol . We are doing everything by the book , keeping receipts for everything and making a note in his taxi accounts book every night logging the exact amount of earnings for the day BUT at the minute , the depot hes working from can only offer him 2 days work (its still quite a quiet time of year apparantly) so i cant quite figure out how i go about recording /working out his taxi insurance allowance.......in his accounts book it states "insurance costs...then theres a column for filling in whether it was a cash payment or direct debit. Now his taxi insurance is by dd and costs £77.20 per month . So any suggestions as to how i would fill this section in ?

Could i calculate it this way : £77.20/31 (days) = £2.49 per day

could i just multiple £2.49 x 2 and enter this figure as his weekly insurance amount ?

I fully understand that as the vehicle is only being used as a taxi 2 days per week , there is a limit to what i can count as business expenses, im hoping it will be easier when hubby is a full time driver lol I just want to get this right , the last thing i need is to get into any trouble with HMRC


fengirl . I know my query is quite long but i will really appreciate any help / advice / tips you can offer.

thanks

joanne

Rolo_Tomasi

Sorry, I'm not Fengirl however......

1. You assumption is basically correct - Total earnings less allowable expenses = the amount you pay tax on. It is usually the allowable expenses that some people struggle with.
2. I would recommend that for the first year you keep a mileage log and all of the expense receipts. You do not have to choose a method until you submit the Tax Return and this way you can choose the most tax efficient way.
3. With the insurance, the way you suggest seems reasonable to me however I assume that the vehicle is insured as a taxi for 7 days a week therefore I would be looking to claim the amount over and above how much it would cost to insure as a car as an allowable expense and not make any further adjustments for the days it is actually used as a taxi.

joanne_d_3

With the insurance, the way you suggest seems reasonable to me however I assume that the vehicle is insured as a taxi for 7 days a week therefore I would be looking to claim the amount over and above how much it would cost to insure as a car as an allowable expense and not make any further adjustments for the days it is actually used as a taxi.


HI AND THANKS FOR THE ADVICE.

Ok , what you have said (as quoted above) sounds like pretty sensible advice.

Please , please , please dont take this the wrong way but can i just ask you is this the "done thing" , the suggestion you have made or is it just the way you would do it if it were you?

I dont mean to offend you and im certainly not doubting the advice you offered its just i really cant afford to do ANYTHING dubious here , the reason being my hubby (who is the one doing the self employed taxi driving) is going through an employment tribunal with his ex employer and this ex employer is being quite annoying lol . I wouldnt put it past them to report us to HMRC annonomysly (sp?) for done something wrong even though we arent !!!!

I know if theres nothing dodgy going on then HMRC cant find anything on us but its just the hassle of being newly self employed and HMRC investigating you , you know?

So thanks again and if anyone else can offer any more advice it will be appreciated.

joanne

fengirl_2

First of all, you cannot claim anything, but all expenses incurred in the business will reduce the tax due.
With motor expenses, just include all the motoring costs in the accounts and then add back the private proportion in the self assessment.
What Rolo has told you is correct - we dont give advice on tax evasion on here.
You are right to be concerned. All cash businesses, including taxis are easy targets for investigation as it is impossible to prove that you are accounting for all your takings.

joanne_d_3

fengirl wrote: »

What Rolo has told you is correct - we dont give advice on tax evasion on here.

Thanks fengirl.

Your quote as above......you dont think i implied in my original post that i am trying to avoid paying tax or ripping off HMRC do you ?

Its quite the opposite really , as i said , every penny my husband earns is being carefully logged in his accounts book on a daily basis. As he earns it , its recorded . Nothing underhand at all.

What i was saying in the op was that i want to ensure that everything i do is correct as i wouldnt put it past my husbands ex employer to report us (falsely i may add) out of spite as we are taking them to an employment tribunal.

On top of everything else , the last thing we need as newly self employed is the HMRC thinking we are up to something , though as they say if theres nothing to find they wont find anything lol

Thanks again

joanne

fengirl_2

No, my reference was to your reply to Rolo's post when you questioned whether what he was saying was true. I was trying to say that we try to give good advice, not to try and hoodwink you into doing something dodgy. Many people who post on here have practical knowledge from either being a poacher or a gamekeeper and we do try and give good advice.

joanne_d_3

fengirl wrote: »

No, my reference was to your reply to Rolo's post when you questioned whether what he was saying was true. I was trying to say that we try to give good advice, not to try and hoodwink you into doing something dodgy. Many people who post on here have practical knowledge from either being a poacher or a gamekeeper and we do try and give good advice.

Hi again Fengirl.

Thanks for taking the time to reply .

I wasnt sure if Rolo was speaking from HMRC employee experience or maybe from being a self employed taxi driver themselves.

That what i asked him....i was just trying to find out if what he was saying was the way HMRC RECCOMMEND calculating the taxi insurance or if the way he was saying it was the way ALL OR MOST SELF EMPLOYED DRIVERS DO.

Any way , between the two of you i now have a clearer idea of what way to calculate it . The method im going to use is calcualting the DAILY cost of insurance and then multiplying it by how many days work he actually does per week.

Thanks again , you have been really helpful , the same goes to ROLO.

Just one more quick question if you dont mind......our taxi insurance is paid monthly , by direct debit. Should we get a wee bank printout every month showing the direct debit payment coming out of our account , just incase we are ever asked for it by HMRC or is this not necessary?

joanne

joanne_d_3

scooby088 wrote: »

just a question here, i'm considering going self employed what can i claim back when it comes to insurance of veichles, fuelling of veichles,

Scooby , im so sorry , it seems i have hijacked your post .

Hopefully you are viewing it too though and learning , just like i am lol

joanne

John_Pierpoint

Interesting quandry.
In my experience mentioning "Taxi" or "Private Hire" makes the insurance shoot up. Some companies won't insure you for you "other" car at any price.
Perhaps allocating the cost by miles driven would be more reasonable (and cheaper)?