Taxi Driver Online

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I am slightly puzzled by this, how can you pay VAT when you don't collect it from the punters, If there are two driver A and B, and A takes a punter say 2 miles and the fare is £4.00, and B does the same run his fare will be exactly the same, as VAT is not shown on the meter or charged.
Driver A is self employed, and driver B but driver B works for a company who bring in more than the fresh holed, so would I be correct in assuming driver B looses out????

The fare charged is deemed to include VAT if the driver or owner is VAT registered, but if not then there's no VAT on the fare - some fare cards actually state this, but even if it doesn't then the legal position is unchanged.

Clearly this puts the VAT registered owner at a disadvantage because he has to hand part of his fare to the taxman (although he can claim back the VAT on fuel, repairs etc) but this is just a quirk of the VAT system that many businesses face, since if a business goes over the VAT threshold then they may not necessarily just be able to add the VAT to his normal charges since they may lose customers, so they just have to take the hit in the pocket.

However, taxis are to an extent unique because the owner/operator can't even choose to add the VAT to fares, but clearly this is because if different taxis on a rank were allowed to charge different fares then this would be a nonsense.

This is own reason why mult-owners sometimes find it difficult to add to their fleet, because if they add another car and that takes them over the VAT threshold then they may end up no better off because of the tax hit.

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Taxi Driver Online
www.taxi-driver.co.uk

The only real way out of these VAT anomolies is to have a zero threshhold for VAT. If you are in business, any businees no matter the size VAT should apply. I know the paper work is a headache etc., but having a threshold restricts growth. I believe most of Europe, in fact most countries worldwide, that have a tax similar to VAT do not have thresholds.
If you are not grossing £60k a year you would probably be better off on PAYE. There is not much of a wage left after you have paid your bills and taxes.

Maybe Taxis and PH having the same VAT exemption as the bus/coach industry would help.

We are public transport after all.

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A member of the Hire or Reward Industry

So you don't have bus wars in your manor then?

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Taxi Driver Online
www.taxi-driver.co.uk

Reply from T.
No we don't. The bus service has got much worse since dereg, services have been lost all over and the bus company clamers for susidies. On the surface that might look good for the taxi trade but long term it is not, because car ownership goes up and for most people is the only practical transport option. When I started taxing we had a good bus service and the taxis were busier. But nostalgia is not what it used to be.