Claiming mileage from a business when not an employee or owner

John_Pierpoint

This is the problem, it starts as a boot sale and grows into a business and HMRC pick in up on their radar. By which time it appears as a criminal enterprise.
Just be aware of the rules right from the start and keep accurate records.
It might well fizzle out in the first few weeks BUT if the turnover looks like getting into 4 figures and definitely if either of you have other taxable income, make sure you come and join us tax slaves.
There is a casual earnings question on the tax return for "one off" situations.
"Death and taxes" - You are going to be doing it for the rest of your life - so learn the rules now.

BTW Check you insurance policy carefully and drive carefully - causing death by dangerous driving while uninsured, is a far more serious situation than owing a few quid in unpaid National Insurance (Yes that is a tax too).

antrobus

00ec25 wrote: »

too simple ... see 2 & 3 below

1. the OP is a supplier to the business and so is Self Employed with a zero net profit - so agreed - no tax to pay ....

Oh good.:)

00ec25 wrote: »

2. self employed people DO have to notify HMRC of that fact and must do so within 3 months of starting up or will be penalised
http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm

The £100 penalty was abolished on 1 April 2010.

00ec25 wrote: »

3. self employed people are liable to pay Class 2 NI at a flat rate of £2.65 per week unless they claim the small rate exemption
http://www.hmrc.gov.uk/forms/cf10.pdf

Technically accurate, but since we've already agreed profits are zero, no NI would be due.

00ec25 wrote: »

4. OP will be reciving payment for driving - aka hire and reward so car insurancne is a very valid issue as pointed out by jnil, ignore that at your peril OP

OP has made it very clear, see post #7 above, that they are asking a question about tax not insurance.

00ec25 wrote: »

failure to do 2 and/or 3 will result in HMRC imposed penalties irrespective of having nil taxable profit

Your 2 and 3 are exactly the same point. Individuals register as self-employed with HMRC in order that HMRC can collect Class2 NIC. As noted above the £100 penalty has been abolished, any penalty will now be "related to the amount National Insurance contributions unpaid because of late notification". Since the amount of NI unpaid would be zero, the penalty would be zero.

HMRC would not be in the slightest bit interested in pursuing this case even if came to their attention. They're not interested in cases where there is no tax to be recovered.

OP can (if he likes) cover all the bases and write to HMRC outlining the situation, but nothing bad will happen if he doesn't.