Taxi Driver Online

Try This link


http://www.hmrc.gov.uk/pdfs/ir56.pdf

It may seem extraordinary that one of the most common Industries that have self employed workers is not covered in this leaflet. (taxi & private hire drivers)

However, I have an explanation to this.

Operators engaging Hackney carriage drivers only, have a clear definition on this status, if only for the fact the drivers can pick up from the ranks, therefore there can be no confussion regarding thier status nor indeed the contractual obligations of either parties. In short they work for the passengers, many of them and not the operator who clearly works for the driver.

Operators who engage private hire drivers only, which is 100% of London PH Operators do, I agree have a less clear position. However if the operation is clearly defined between Agent or principle and those lines are not blurred, for example the Agent charges the passenger VAT on the journey when the driver is not registered then the drivers self employed status remains clearly in tact. The operator charges the driver for the operators services plus the VAT and NOT the other way around.

The trouble here of course is MOST Operators who are registered for VAT have been misadvised by their so called accounts to charge VAT to all account customers, which is the wrong way to do it as this action automatically classes the operator as a principle which therefore means his/her drivers are in fact EMPLOYED.

The obvious difficulty here is changing the way an operator is doing this if they are already doing it incorrectly, as confussion will reign not just with the Revenue but also the customers and the drivers. ALL of which will think you are trying to pull a fast one and quite rightly so.

However if just starting out or just getting to the VAT threshold and need to register then you will need to make sure you are clear on your own status as well as your drivers and not be tempted to cloud the issue as it WILL come back and bite you later, and very hard.

One of the intresting things here is that Operators, especially in London are still listerning to those same accountants who have put them in the brown stuff and as a result are ruining thier business's by withdrawing the facility of a company vehicle, all I can say is on thier heads be it.

As for new drivers who are registering as self employed from April 1st 2006, you the operator must make it clear to them that it is them who has the contract with the passenger not you and it is you as an operator who works for and charges them for their service and that 100% of the cost of the fare is their is turnover not yours. There is a new question on the self employed registration form which asks, if you are or are going to do all your work for one person or firm, please enter their name and address.

I can see 1000's of drivers implicating 100's of Opertors over the next year which WILL change the operators status if this issue is not discussed with ALL new drivers who are working as PH and we make them ALL understand the correct position.

Kind regards

Eric