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 Post subject: Help...Impossible Form
PostPosted: Fri Jan 29, 2021 12:59 am 
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We have been asked by our Local Authority to complete a claim for financial support towards our undelivered contract runs due to the School closures, Basically it seeks to work out what they will pay us by calculating the Constant expenses of the vehicle less the reduced variables which result from a vehicle sitting idle.

Here's a wee excerpt from the instruction letter:

Quote:
Targeted Funding for Home to School Transport Operators
The Council recognises the challenges faced by Operators during the current period of restrictions. In these difficult circumstances, and to provide support for sustained and significant impacts to service delivery, the Council can consider applications for financial support towards the fixed costs being incurred as a result of those services on a temporary hold.
This public funding aims to support the economic resilience and sustainability of those local transport suppliers who have been most affected by the recent restrictions.
The details are as follows;
• Operators will be paid in full to the end of January 2021 based on usual payment process
• From 1st February 2021, targeted cash flow support will be available to qualifying operators through the mechanism laid out in the attached template
• Claims should be made for only those services not currently being delivered. Services currently in operation do not qualify for this support scheme
• A separate claim must be made for each calendar month and within 30 days of each month end. Unfortunately, claims made out with period this will be declined.
• This support package will end on the date services restart and/or the relevant restrictions are lifted


Now heres what I see as the nonsenical and impossible submission form, Do you think this can be filled in, you start at the Top with your normal Price for the month then it simply subtracts all costs both constant and variable as well as subtracting profit....if you do that it will always end up as ZERO at the final total.

Help...It's driving me nuts.


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PostPosted: Fri Jan 29, 2021 1:38 am 
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bloodnock wrote:
Now heres what I see as the nonsenical and impossible submission form, Do you think this can be filled in, you start at the Top with your normal Price for the month then it simply subtracts all costs both constant and variable as well as subtracting profit....if you do that it will always end up as ZERO at the final total.

I kind of see what you're getting at, but strictly speaking I'm not sure if it does tell you to subtract fixed or constant costs (I assume fixed and constant means much the same thing here).

So say you normally charge £100. Your fixed costs are insurance and licence fees of £30.

Your variable costs are fuel and tyres at £50. So your profit is £20

So what they're asking you to do is:

£100 which is contract value, less

(£50) which is variable costs

(£20) which is your profit.

So 100 - 50 - 20 = £30

Thus £30 is the fixed costs, which would be reimbursed.

So I think the important point is that they're *not* asking you to subtract fixed or constant costs, so those costs should be the result when you've done the sums.

(My example is just a very simplied thing, and obviously it's more involved than that.)

But that's just my quick impression. Will have a look either later tonight or tomorrow, or maybe someone else has done a similar form and could therefore advise.

But it seems a roundabout way to do it all. If you know all these figures, then by implication you should know your constant(fixed) costs, so why don't they just ask for them? :-s


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PostPosted: Fri Jan 29, 2021 11:05 am 
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Aye....I looked at it again in the way you suggested and filled it in as you suggested, simply totalled up all the vehicles running expenses and put in the proportional costs of the vehicles School contract mileage and then deducted the variables such as Fuel, wear and tear and cleaning etc....eventually I ended up claiming for around 75% of the full run price. to be honest I could have gave them a 75% value without the use of their elobarate form.

I think they are doing it this way in the hope that some operators will claim a smaller percentage, but wouldn't you think they would offer a flate rate perecentage to all operators of unserved contracts at say 75%.


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PostPosted: Fri Jan 29, 2021 11:15 am 
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tight bstards

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PostPosted: Fri Jan 29, 2021 11:26 am 
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wannabeeahack wrote:
tight bstards


I really can't complain, they have been pretty decent to us operators of contracts over the last 10 months.


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PostPosted: Fri Jan 29, 2021 1:15 pm 
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bloodnock wrote:
but wouldn't you think they would offer a flate rate perecentage to all operators of unserved contracts at say 75%.

75%..............We are getting 25%.

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PostPosted: Fri Jan 29, 2021 2:50 pm 
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grandad wrote:
bloodnock wrote:
but wouldn't you think they would offer a flate rate perecentage to all operators of unserved contracts at say 75%.

75%..............We are getting 25%.


We were on 100% until it changes in February, We'll just have to wait and see what comes of our submitted prices.


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PostPosted: Sat Jan 30, 2021 5:01 pm 
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bloodnock wrote:
Aye....I looked at it again in the way you suggested and filled it in as you suggested, simply totalled up all the vehicles running expenses and put in the proportional costs of the vehicles School contract mileage and then deducted the variables such as Fuel, wear and tear and cleaning etc....eventually I ended up claiming for around 75% of the full run price. to be honest I could have gave them a 75% value without the use of their elobarate form.

I think they are doing it this way in the hope that some operators will claim a smaller percentage, but wouldn't you think they would offer a flate rate perecentage to all operators of unserved contracts at say 75%.

75%?? :shock:

Well I don't know what's morally right, but I suspect they'll be expecting figures a lot lower than that :-o

Anyway, that's between you and them :wink: but seems a very convoluted method they're using to get to the desired figure.

If it was up to me I'd ask operators to submit a claim simply for unavoidable fixed costs, or something like that, and ask them to justify their figures.

But, of course, there's lots of different approaches to this sort of thing, and even qualified accountants looking at a single car doing a single run would very probably all come up with different figures, and none would necessarily be wrong.

And the form looks like it's aimed primarily at bus operators, perhaps larger operations with accounants who will normally draw up monthly management accounts, or similar.

And I don't know about school runs, but on the normal bus routes don't they have to submit a projected profit figure when tendering for routes and subsidies, and stuff like that?

Which is maybe where the methodology on the form comes from...


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PostPosted: Sat Jan 30, 2021 5:38 pm 
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The seek to save a bit of money by paying their contractors by their contract price less profit and variable costs to leave only the Fixed Expenses which cover everything from Vehicle HP, Insurance, VED, driver and Vehicle Licences, Drivers wages (or the 20% for Furloughed drivers)...Ive also added in depreciation of the value of the vehicle for the as a monthly percentage, All these bits and pieces soon add up towards the 75% fixed costs i mentioned.

Even as a self employed driver I take an income and thats a fixed cost and a wage that i need to live off.


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PostPosted: Sat Jan 30, 2021 8:49 pm 
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What is morally right "Not one proprietor or driver of a licensed vehicle should have to go with a begging bowl to try and obtain financial assistance from their Council"


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