Taxi Driver Online

Hi fellas, I'm just wondering what the deal is with VAT for Private Hire drivers.

Am I correct in thinking that you pay 17.5% of all revenue, but are exempt from paying it on petrol and other costs, and this money can be effectively claimed back?

Thanks for any details, and congratulations on having what seems to be a very informative and friendly forum.

There have been a number of threads on VAT and it might be worth you using the search function at the top of the page.

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IDFIMH

If you are registered for VAT you must account for vat on all your income but you claim back the vat on all your outgoings which are vatable.

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Grandad,
To support my charity text MAYORWALK to 70085 to donate £5

Surely my revenue would be more than my outgoings, so it would make no sense to register?

Give me a boot up the arse if I'm being annoyingly simplistic here.

You're correct - it makes little sense to register unless you have to.

You pay VAT on all your takings, but clearly the VAT on your expenses - which you can claim back - will be a lot less than this.

On a pedantic note, the 17.5% VAT is applied to the takings net of VAT, so if you're trying to work out VAT on your gross takings it's actually about 15% - to be precise, multiply by 7 then divide by 47.

Makes sense, and pretty much confirms what I'd thought, thanks.


/boots self

So I take it that a driver who is barely over the VAT threshold takes the hit on everything he earns, and is therefore worse off than a driver who falls just below the threshold, despite the former's revenue being higher? Ouch.

You got it.

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http://wingsoverscotland.com/ http://www.newsnetscotland.com/

Of course if you are a hackney then the VAT is already in the fare and you do not charge it on top of the fare so you are even more out of pocket.

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Grandad,
To support my charity text MAYORWALK to 70085 to donate £5

VAT is included in the metered fare if the operator is registered for VAT, according to our tarrif sheet. That is just to stop anyone adding VAT to the fare. If you register, you have to pay about 15% of your takings in VAT, minus any VAT you had to pay yourself. Unless you run at a loss, you will always lose out on VAT. So why do it unless you have to?

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http://wingsoverscotland.com/ http://www.newsnetscotland.com/

AHHHHHHHHHHHHH....so its only in the Metered price if the Operators VAT registered....thats somewhat different to how I read it from Grandad.

if its not in the price I wouldnt register either as its a Pain in the Bum.

Sorry about the confusion Boggins but yes it is just like Gusmac says.

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Grandad,
To support my charity text MAYORWALK to 70085 to donate £5

Initially, it seemed a bizarre way for the VAT office to be implementing things. Then the info was passed over to the cynic in me.

Over the threshold = Driver is out of pocket so will either have to work LONG hours to make it up, or expand his/her business, therefore generating more VAT payments/general tax revenue.

Under the threshold = Not doing too badly, no real incentive to give up and go back to a 9 to 5, therefore generating more VAT payments/general tax revenue.

NOW it makes sense...