🗳️ ELECTION 2024: THE MSE LEADERS' DEBATE Got a burning question you want us to ask the party leaders ahead of the general election? Submit your suggestions via this form or post them on our dedicated Forum board where you can see and upvote other users' questions. Please note that the Forum's rules on avoiding general political discussion still apply across all boards.
self employed
Options
Comments
-
John_Pierpoint wrote: »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)?
John.
Thanks for the reply.
I think counting the miles and working out the insurance that way would (for me) work out a little more difficult/time consuming.
I have now calulated that hubbies taxi insurance costs x amount per day so (for me) the easiest way to work it out is simply multiply x amount by the number of days he actually works.
Although hubby is self employed , he works from a depot and at the min , the owner of the depot can only offer hubby a few days work each week. Apparently its still pretty quite at this time of year and the depot is only a very small business.
Hopefully as the year goes on though business will pick up and hubby can work extra days.
The only query im left with now is this:
We are keeping all fuel rreceipts as we get them but with the taxi insurance , this is paid by monthly direct debit . DO WE NEED TO KEEP A BANK CASH MACHINE PRINTOUT OR BANK STATEMENT IN OUR ACCOUNTS TO VERIFY THE INSURANCE COSTS?
any advice is appreciated
joanne0 -
I would think that the quote followed by the certificate of insurance would be sufficient.
Have you got a current account, through which you put the taxi business?
If you try to do everything in cash or mix up the taxi stuff with your private account you will be setting your self up for an investigation.
As you are trading in your own name in a very small way you should be able to open an ordinary account, without having to shout "I want a business account please help yourself to my money" in your chosen bank or building society.
(I remember a colleague who was almost in tears explaining the hard time he had been given by the tax man - as he explained it the only sin he had committed was leaving it late to buy his wife's Xmas present and then finding out the only way to buy it was to use his business credit card.) Obviously the taxman thought he had found someone charging Xmas presents to expenses to get in effect a 30% discount from the rest of us.
The last thing a tax inspector wants to do is wade through a mess of mixed up items asking for a documented explanation of every entry.0 -
Hi John.
In response to your question about bank accounts etc.....
As i mentioned , my husband has only started self employment.
At the minute , his takings are not that high .
As we have 3 kiddies and i work part time so dont earn very much , most of the earnings he brings home arent even making it as far as a bank account lol.
Come to think of it , even when he works more hours than he is now , i would say his earnings per week (after diesel , radio rental etc) will only be some where around £200......If im being honest we probably WONT bank money on a regular basis because by the time we pay:
Mortgage
taxi insurance (monthly by dd)
private car insurance
rates
electric , gas , televison licence
school dinners
loan payments
food
clothing for kids
home isurance
etc etc etc
We wouldnt be left with much to bank lol.
Is this going to cause a problem for us ? Is it "suspicious" if a self employed person DOESNT have a business account and regular lodgments ?
We WILL have an account seperate from our own and will transfer an amount into this account each week for tax/ni payments.
joanne
Sorry for this post turning into a story lol , i just dont want to get anything wrong.0 -
I am sorry but I think you are in danger of going wrong with the taxi insurance.
The basic principles of taxation are that you should calculate your business profit in accordance with standard practice and then adjust the accountancy profit in accordance with tax law.
Being a retired Inspector of Taxes, not an accountant, I wouldn’t dream of trying to define standard accountancy practice but in all the accounts I have ever seen the total costs of running the car are grouped together under a label such as “motoring costs”.
Then, for Income Tax purposes, the private use proportion is “added back” to the accountancy profit when calculating the taxable profit.
I fundamentally disagree with Rolo’s suggestion at post #4
“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.”
Whilst fengirl seems to have suggested in post#6 “What Rolo has told you is correct.” I think other things she has written suggest that she does not agree with Rolo on this particular point. Hopefully she will come back on that.
My reason for saying all that is the fundamental rule that nothing is allowable for tax purposes unless it is incurred wholly and exclusively for the purposes of the business.
With the taxi insurance that you appear to have it seems to cover both the use of the car for business purposes and for private use.
Therefore the total premiums paid are not exclusively for business purposes.
That is when apportionment comes in and this is based on case law rather than the Tax Acts.
Then, as fengirl said, you lump together all the costs of running the car and apportion the total costs between business use and private use in the proportion of business mileage to private mileage.
Whilst it is not the taxman‘s problem if your car is covered for use as a taxi 7 days a week when it is only used as a taxi 2 days a week your car may be over-insured and you may be paying money for nothing.
When it comes to your business records the first principle is that you need to keep control of your own finances and occasional mini statements may be really useful to you. However, if HMRC do enquire into your Return, nothing short of a complete set of bank statements covering the whole business year will fit the bill
Jimmo , thanks for taking the time to post all of that out !
you say that the taxi insurance i hold "must cover business use and also private use"....YES , that is correct . ALL taxi policies cover the driver for taxi'ing AND personal use , after all , no-one taxi'ies 24 hours per day.
Your suggestion of getting a quote for the car NOT as a taxi and then a quote with the car AS a taxi us probably the option i will go with .
You also say that the HMRC wont be happy with anything other than a complete set of bank statements ....... as per my post above , very very little of the money my hubby will make whilst being self employed will actually SEE the bank lol so they could investigate the account if they wish...they wont see much!!
You also say that fengirl seems to disagree with some of rolo's points from his post......i find (and no offence here) that fengirl tends to stick to a script when shes advising on thid forum , she doesnt go into detail and is very vague in some of her answers.
thanks again for your time
IM ACTUALLY CONSIDERING GETTING AN ACCOUNTANT FOR THE FIRST YEARS ACCOUNTS....£125 WELL SPENT I THINK LOL
joanne0 -
I am a taxi owner and put ALL money through an account first before spending any of it.So that I have bank statements for the money going in and coming out.
The price of your taxi insurance doesn't make sense...it sounds very low unless you paid a big deposit...taxi insurance for owners that have held a badge for 3 years or longer is about £1k with full no claims discount.
Please check that you have the right insurance!!!
What sort of insurance do you have?0 -
I am a taxi owner and put ALL money through an account first before spending any of it.So that I have bank statements for the money going in and coming out.
The price of your taxi insurance doesn't make sense...it sounds very low unless you paid a big deposit...taxi insurance for owners that have held a badge for 3 years or longer is about £1k with full no claims discount.
Please check that you have the right insurance!!!
What sort of insurance do you have?
Hi taxi73.
Thanks for taking time to reply.
Our taxi insurance is £77.20 per month by direct debit. Thats fully comp , with protected ncb. (£77.20x12)
Our insurance company (axa) are brilliant ! They allow you to offset (some) private ncb towards your taxi insurance and as hubby has been insured through axa for many years he got a good rate . (hes been driving 15 years)
Rest assured , our insurance is all up to scratch lol.
Do you , as a self employed taxi driver have any hints or suggestions as to how we should calcualte our allowable portion of taxi insurance ?
How do you pay for your insurance and do you claim it all back as an expense ?
Any other useful bits of info you could offer from experience?
Thanks again.
Joanne0 -
Sorry Taxi73 , i meant to ask , do you do your own books and self assesment or do you use an accountant ?
Thanks
joanne0 -
Sorry Taxi73 , i meant to ask , do you do your own books and self assesment or do you use an accountant ?
Thanks
joanne
You should always "do your own books" which merely means recording income and expenditure so that anyone can see what exactly happened 12 months later. This really isn't optional.
Choosing an accountant, is optional, some people can do it themselves, some can't. Just remember they know how to get the most out of working from home, employing a spouse and private use of anything.The only thing that is constant is change.0 -
I am sorry but I think you are in danger of going wrong with the taxi insurance.
The basic principles of taxation are that you should calculate your business profit in accordance with standard practice and then adjust the accountancy profit in accordance with tax law.
Being a retired Inspector of Taxes, not an accountant, I wouldn’t dream of trying to define standard accountancy practice but in all the accounts I have ever seen the total costs of running the car are grouped together under a label such as “motoring costs”.
Then, for Income Tax purposes, the private use proportion is “added back” to the accountancy profit when calculating the taxable profit.
I fundamentally disagree with Rolo’s suggestion at post #4
“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.”
My reason for saying all that is the fundamental rule that nothing is allowable for tax purposes unless it is incurred wholly and exclusively for the purposes of the business.
With the taxi insurance that you appear to have it seems to cover both the use of the car for business purposes and for private use.
Therefore the total premiums paid are not exclusively for business purposes.
That is when apportionment comes in and this is based on case law rather than the Tax Acts.
Then, as fengirl said, you lump together all the costs of running the car and apportion the total costs between business use and private use in the proportion of business mileage to private mileage.
l
I would, of course, compare the two methods to see which was the more advantageous before I opened my mouthThe only thing that is constant is change.0 -
zygurat789 wrote: »You should always "do your own books" which merely means recording income and expenditure so that anyone can see what exactly happened 12 months later. This really isn't optional.
Choosing an accountant, is optional, some people can do it themselves, some can't. Just remember they know how to get the most out of working from home, employing a spouse and private use of anything.
Hi Zygurat789.
lol you can tell im new to this cant you ?
I was meaning the self assesment .
Theres no chance of hubby employing me so we dont need an accountant to work THAT out !!
Are you self employed ?.......A taxi driver ?
Thanks for taking the time to reply
joanne0
This discussion has been closed.
Categories
- All Categories
- 2 Election 2024: The MSE Leaders' Debate
- 343.8K Banking & Borrowing
- 250.3K Reduce Debt & Boost Income
- 450K Spending & Discounts
- 236K Work, Benefits & Business
- 609.1K Mortgages, Homes & Bills
- 173.4K Life & Family
- 248.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards