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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.

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

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.

If VATs already in the Hackneyed fare then I suggest Voluntary VAT registration....at Least then you could also Claim it back on Fuel and other Purchases...youd Have nowt to lose except Extra Paperwork.

Boggins wrote:

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?

Author:	York Guy [ Wed Jul 09, 2008 3:55 pm ]
Post subject:	Quick VAT query
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.

Author:	Sussex [ Wed Jul 09, 2008 4:05 pm ]
Post subject:	Re: Quick VAT query
York Guy wrote: 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.

Author:	grandad [ Wed Jul 09, 2008 4:11 pm ]
Post subject:	Re: Quick VAT query
York Guy wrote: 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. 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.

Author:	York Guy [ Wed Jul 09, 2008 4:15 pm ]
Post subject:
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.

Author:	Fae Fife [ Wed Jul 09, 2008 6:17 pm ]
Post subject:
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.

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Author:	York Guy [ Wed Jul 09, 2008 6:22 pm ]
Post subject:
Makes sense, and pretty much confirms what I'd thought, thanks. York Guy wrote: Give me a boot up the arse if I'm being annoyingly simplistic here. /boots self

Author:	York Guy [ Wed Jul 09, 2008 6:37 pm ]
Post subject:
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.

Author:	gusmac [ Wed Jul 09, 2008 6:54 pm ]
Post subject:
York Guy wrote: 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.

Author:	Boggins [ Wed Jul 09, 2008 9:30 pm ]
Post subject:
If your Under The Vat Threshold you dont Charge VAT unless you Volunteer to become Vat Registered, This would be Dumb as you would have to Charge VAT at 17.5% to all your Fares but you Could Claim VAT back on Everything you buy. However youd get less Back than you Paid out so its not worth the Effort or extra Work, nor would your Clients be happy at Paying 17.5% Higher Fares. The only Time it Works to register for VAT even if your below the VAT threshold is if you run a Vehicle with 10 Passenger seats or more, this would be have to be a Certificated PSV and your Driver would Need a PSV drivers license. this is because if your VAT rgeistered you can Reclaim your VAT on all puchases seeing as its a PSV but it is Zero Rated to the Customer, its an enticement to use Bus style Travel. on the Down side you would need to run this as a Seperate Business to your PH or Taxi Business unless your alread VAT registered. if your Not VAT registered and Tried this youd need to charge VAT on all fares as youd have to Register for VAT to take advantage of it. thats why it needs to be Run as A seperate Business for VAT purposes....it also means you have to have another set of Business accounts, do Quarterly VAT returns and its a real Hassel. Ive Tried it and Gave it up as a bad Job after 3 years as the Extra work didnt Reflect in the VAT i got Back... Its nothing to do With PH but only A PSV based Business.

Author:	grandad [ Wed Jul 09, 2008 11:51 pm ]
Post subject:
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.

Author:	Boggins [ Wed Jul 09, 2008 11:59 pm ]
Post subject:
If VATs already in the Hackneyed fare then I suggest Voluntary VAT registration....at Least then you could also Claim it back on Fuel and other Purchases...youd Have nowt to lose except Extra Paperwork.

Author:	gusmac [ Thu Jul 10, 2008 12:11 am ]
Post subject:
Boggins wrote: If VATs already in the Hackneyed fare then I suggest Voluntary VAT registration....at Least then you could also Claim it back on Fuel and other Purchases...youd Have nowt to lose except Extra Paperwork. 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?

Author:	Boggins [ Thu Jul 10, 2008 12:50 am ]
Post subject:
gusmac wrote: Boggins wrote: If VATs already in the Hackneyed fare then I suggest Voluntary VAT registration....at Least then you could also Claim it back on Fuel and other Purchases...youd Have nowt to lose except Extra Paperwork. 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? 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.

Author:	grandad [ Thu Jul 10, 2008 7:12 am ]
Post subject:
Sorry about the confusion Boggins but yes it is just like Gusmac says.

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Author:	York Guy [ Thu Jul 10, 2008 9:02 am ]
Post subject:
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...