Black cab questions

bruciebounus

My boyfriend is a black taxi driver in London and I am trying to help him get his finances in order!

Can he claim all business related fuel expenditure? Also cab rental is £215 per week, can this be claimed back or only a percentage?

John_Pierpoint

Hi Brucie bonus,
You almost certainly need to explain a bit more about about the mechanism that enables your other half to earn his money, but anything that has to be bought to enable him to work as a Taxi driver is allowable against his profit before the tax is charged.
Grey areas are food/meals and use of the cab for journeys that could be seen a personal/domestic - such as collecting you and the groceries from the supermarket?
Does he wear a uniform ?

There is almost certainly a "Taxi" (as against a hire car or courier) drivers forum where these issues get discussed.

John.

bruciebounus

Thank you John, he is a london black taxi driver, so does not work through a company and is self employed. No uniform etc.

He rents the cab from a taxi garage, but I can only find info about claiming back if he has purchased the cab, but not if he rents it!

nikkihawkins84

Has he registered as self employed with HMRC? Your bf can claim anything that is wholly and exclusively for business purposes... so he can claim for the rent, maintenance, cleaning and petrol for the taxi. As we have to eat whether we work or not he cannot claim for food.

If you need any more help or a spreadsheet to keep track of what's going in or out let me know and I'll send you one.

Nikki

John_Pierpoint

The point about a uniform is that we are not allowed to drive the streets naked, but sticking some logos onto our clothes transforms them into business assets and makes their purchase and upkeep tax allowable.
Similarly an overnight assignment away from home (not usual for a Taxi driver) would make overnight subsistence a tax allowable claim.
Don't forget administrative charges against London Taxi drivers; CRB checks that sort of thing [The costs of training to pass the tests to become a Taxi driver are probably not allowable but maintaining and enhancing skills and permits are allowable for both driver and vehicle].

There is a concept that the tax system does not subsidise "criminal" behaviour - but driving in London makes wicked offences almost impossible to avoid (such as getting filmed trapped on a yellow box junction when the lights change!) - these are the sort of specific problems where a black cab forum could help out.

You have to realise that the tax system has not been designed, it has been cobbled together by politicians, continually needing more of the people's money.

BTW make sure he has a "bank" account through which he puts all the financial ins and outs of his business and that he keeps a journal (Italian for diary) that shows his takings and expenses and where he keeps ALL his receipts.

Good luck, let us hope that soon you have to start worrying about the VAT system because his enterprise is doing so well, that it will need to register for that tax too.

bruciebounus

nikkihawkins84 wrote: »

Has he registered as self employed with HMRC? Your bf can claim anything that is wholly and exclusively for business purposes... so he can claim for the rent, maintenance, cleaning and petrol for the taxi. As we have to eat whether we work or not he cannot claim for food.

If you need any more help or a spreadsheet to keep track of what's going in or out let me know and I'll send you one.

Nikki

Thanks Nikki, I thought that he was able to claim rent and petrol, but monthly that adds up to more than he is due to pay for tax???? Surely all his tax cant be wiped out from expenses???
P.s. the spreadsheet would be extra helpful, shall I pm you my email address?

John_Pierpoint

The tax man will never actually subsidise a loss making business over time - that is a hobby not a business.
Remember tax is a weekly tax in the form of National "Insurance" and Income Tax on a yearly basis. Both these taxes have "nil rate bands" where the a lowish level of profit is not taxed.
Has your partner only recently taken up "cabbing" ? What was he doing "last year"? The tax year starts on 6th April and finishes on the subsequent 5th April.
http://www.hmrc.gov.uk/sa/deadlines-penalties.htm

Having qualified as a London cabbie, displaying a plate licence and allowed to be "hailed" on the street, unless he is not working long hours and not working in a busy area, even in this recession, he would be expected to be paying tax?

Don't forget it is Self Assessment and the tax man has to believe the forms you fill in. Being audited is not to be recommended.

pjread

bruciebounus wrote: »

Thanks Nikki, I thought that he was able to claim rent and petrol, but monthly that adds up to more than he is due to pay for tax???? Surely all his tax cant be wiped out from expenses???
P.s. the spreadsheet would be extra helpful, shall I pm you my email address?

Might be a silly observation, but you are aware you don't just work out the tax, then take the total cost of anything tax deductable off of the tax due, right?

John_Pierpoint

It might not be a silly observation - on this forum there are a lot of people that think the tax allowance is 45p a mile and then are shocked to find that this means earn a pound, deduct the 45p to show a profit of only 55p not 100p and so instead of paying 20p income tax pay only 11p - the tax man has chipped in 9p not 45p !!!!!
[Claiming the 45p reduction in profit for the first 10,000 miles is a short hand alternative to having to calculate the real costs of hiring and fuelling a vehicle BUT in the case of a diesel (LPG?) taxi the full calculation is likely to come out at a higher number and thus reduce the profit more and thus save more tax.
Yes I know that London black cabs charge a lot more than £1 a mile:
http://www.londonblacktaxis.net/faretariiff.htm ]

bruciebounus

Hi PJ ans John, no, not a silly observation as that was what I had been doing So how is it calculated? I am also trying to find an accountant at the moment, so should all be made clear soon!

CKhalvashi

bruciebounus wrote: »

Thank you John, he is a london black taxi driver, so does not work through a company and is self employed. No uniform etc.

He rents the cab from a taxi garage, but I can only find info about claiming back if he has purchased the cab, but not if he rents it!

As long as he has a rental agreement, this can be claimed back.

Fuel, servicing etc. can also be claimed ack, anything that is essential for being a taxi driver, as can redo rent if he pays this.

CK