Taxi Driver Online

Talking of VAT can somebody tell me if the tarriff on PH work is inc of VAT. I know it is for Hacks as it is set by the council. I tried to find out from the company I pay my settle to but no joy there. I ask this because we have an account with the company it was always my understanding that VAT was already included in the fare rate, also you couldn't charge VAT for work undertaken by drivers that are not VAT regd unless they actually work for you and not as a self employed individual. I know they can charge a service charge and then charge VAT on that element of the invoice. Also can they charge more than the actual tarriff set by themselves?

It all seemed so simple to start with, mother would ring for a taxi and we would pay for it through the account set up but it never tallies with the receipts she gets for the jobs done so now it's very confusing and it's beginning to hurt my brain.

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Note to self: Just because it pops into my head does NOT mean it should come out of my mouth!!

Only if you are VAT registered. I think.

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IDFIMH

Having spoken to Vat advice service, that are about as useful as chocolate teapot, they confirm that taxi fares are indeed a Vatable commodity (which I already knew) and if a driver is vat registered he would have to pay his dues to the vat man. Seeing as most drivers be it HC or PH don't set their own tarriff, that's set by the council or the company they work for, is that tarriff inc of vat. I know from previous posts that HC fares are inc of vat and drivers can't add the 17.5% to the metered fare and I believe that is probably the case for private hire, therefore, surely the company can't charge vat for work done by somebody who is not vat registered and is also self employed although using their system to get work. I know it would be different under contract work because the driver is then working for them under a contract so the vat element would apply to the company who invariably should be vat registered anyway.

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Note to self: Just because it pops into my head does NOT mean it should come out of my mouth!!

If your HC and VAT Registered the VAT is inclusive in the metered fare.

In the other respect with PH...I understand the contract is between the Customer and the Operator, therefore the operator is entitled to charge VAT on the invoice.....the driver is an agent or sub contractor he will be charging the Operator, if he's VAT registered the invoice to the operator will include VAT...if he's not it wont....either way you are carrying out the work for the operator..... not the account customer.

Im going to add an 'I think' to that

CC

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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

You dont charge VAT unless your VAT registered otherwise the VAT man would never get the VAT back you charged.

There are several VAT cases on TDO.

Just type in VAT and search under licensing and legal.

Regards

JD

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Copyright notice © The contents of this post are copyright of JD and are not to be reproduced outside of TDO without written permission.

You see it's that bit "I think" everybody I've spoken to seems sure of their opinion but then adds the "I think". If you read the regs about vat relating to taxis on the gov website you'd see what I mean. Apart from contract work is not the same as account work anyway.

If vat is already included in the tarriff surely it cannot be applied twice just because the customer has an account. If it's not included in the tarriff then surely the words "plus 17.5% vat if your driver is vat registered" should be slapped on the tarriff cards. That would then mean customers ringing the company and complaining they've been over charged because the fare rates would be so different from one driver to the next.

There is no dispute taxi fares ARE subject to vat that we already know.

So if I'm subcontracted out by the company to cover contract work they say it is for example £1 per mile I must surely have to ask them for the VAT on that if I'm VAT registered. Do you think the Vat will already be included in the fare then!!!

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Note to self: Just because it pops into my head does NOT mean it should come out of my mouth!!

This is good bedtime reading and is designed to confuse but if anybody can make head or tail of it I'll be the first at the bar to em a pint, lol.

3. Businesses which engage drivers

3.1 What types of business does this cover?
This includes all businesses, whether they are a sole proprietorship, partnership or limited company, which either:

employ staff to drive taxis or private hire-cars or
take on self-employed drivers to work under a contract for services.

3.2 Accounting for VAT
If you run a business of this kind, then unless you are acting as an agent for any of your drivers for some, or all, of the work they do (see paragraph 3.3), you are a principal in making the supply of transport to the customer. In working out the value of your supply you should remember that this must include:

the full amount payable by the customer before deducting any payments made to your drivers
any fares you (as the sole proprietor, director or partner) receive if you drive for the firm
the full fares payable by passengers even if you sub-contract work to an independent business or owner driver and
any referral fee you receive from other taxi businesses.

3.3 Agent or principal?
As a taxi or private hire car business you may perform two different types of work. These are:

cash work, where individual customers pay cash to the driver on completion of the journey and
account work, where regular customers, particularly companies and institutions, are allowed to settle their bills periodically.
If all your drivers are employees you are a principal and must follow paragraph 3.2 when accounting for VAT. However, if your drivers are self-employed you may, depending on the agreements you have with them, be acting as their agent for cash work and in some cases for account work as well.

3.4 Agent for both cash and account work

Whether you are acting as an agent depends on the terms of any written or oral contract between you and the drivers, and the actual working practices of your business. For further information on how to decide whether you are acting as an agent or a principal see the section dealing with agents in Notice 700 The VAT Guide. Typically in acting as an agent for your drivers you will:

relay bookings to the drivers (usually on a rota basis) for an agreed fee
possibly also provide them with other services such as the hire of cars or radios and collect fares on their behalf from account customers.
If you act as an agent, the drivers are entitled to the full fares paid by the customers, even though the charge for your agency services may be deducted from the account fares you collect for them.

When you are acting as their agent, the drivers make the supplies of transport. In which case VAT is only due on the fares payable by the customers if the driver is registered for VAT. If the drivers are not registered for VAT, you must not charge VAT or issue a VAT invoice on their behalf for the customers’ fares. For further information about how you should account for VAT if you issue invoices on behalf of VAT registered drivers, see the section dealing with agents in Notice 700 The VAT Guide.

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Note to self: Just because it pops into my head does NOT mean it should come out of my mouth!!

As I read this my interpretation would be that if the driver is not registered for VAT then no VAT is payable from the fare. If the agent is VAT registered then the agent must pay VAT on his part of the fare.

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Grandad,

Im In agreement with grandad...

Almost all taxi drivers are self emplolyed and if their annual turnover is under £59000 a year they do not need to be registered for VAT so the fare metered is what they will charge the company exclusive of VAT

If the company is VAT registered then they will probably have to add VAT onto the invoices to meet the customs and excise rules

If the job is a quoted price job then VAT must be added if you are VAT registered. If it it a metered job then VAT is included in the fare and must not be added on top.

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Grandad,

quoted or metered.....no difference (you rarely quote vat free unless to a business)

its the status of the charging body/person (driver or firm) that has the responsibilty to pay over the vat to HMRC

if your vat registered its vat inclusive and you owe hmrc 17.5% - but will be claiming your fuel vat back

if your not vat regd you wont have a input/output vat calculation every quarter ..........

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Of all the things ive lost, i miss my mind the most

It all makes for interesting if not confusing reading. My opinion is this,

Fares already include the VAT. If I'm VAT registered then I pay the VAT if not it doesn't matter. The Company sends an invoice for the fare that already has the VAT element included in it so the VAT to be added to the invoice is that of the 'Service Charge' at whatever rate they agreed with the customer.

This is only an interest to me now because I have an account so my mother can get around when I'm not about.

To make matters worse anyway the difference in the prices charged on the invoices is not that of a rate of 17.5% nor is it at the rate of 10% which is their 'Service Charge' nor is it the rate that is on the receipts obtained from the drivers for me to keep records. It appears to be a random amount. They office admin say its VAT but then they don't know I have the receipts from the drivers so they don't know that I can see the fault. Also if it is VAT they surely must show it as VAT and not disguise it as a fare charged by the driver thus implying that he driver got all the money when obviously they didn't because that's not what they will have applied for they will have applied what was on the receipt. Anyway here is a small eg of what I am talking about.

The fare cost £5.90 according to the receipt. £6.90 + VAT according to the invoice. Another fare £2.70 on receipt £3.50 + VAT on invoice. Another fare which is what set ball rolling because I wanted to know the driver who tried to rip me off for £2.00 was £14.50 charged £16.60 + VAT on invoice. I was ready to give the driver a verbal lashing when I found out that they had charged £16.60 for a job I knew was only £12.50 I later found out that they had charged £14.50 because of the unaviodable detour which is accepable so now I want to know where the £16.60 came into it, the office implied the driver had overcharged.

It comes to something when the company you work with is not content with money you give them each week but they actually try to rip you off on account as well!!! Maybe the eighty odd pounds per week that over 300 drivers are paying is not enough to line their pockets who knows.

Anyway I'll let you know what they say when I've had my appointment but it all looks a little suspect to me and lets hope the VAT Man never goes in to check their records cos they will have some explaining to do

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Note to self: Just because it pops into my head does NOT mean it should come out of my mouth!!

if your not vat registered forget it


if you are keep a record, add it all up, divide by 1.175 to give the vat free element

add up your vat spendings (mainly fuel, but could include vehicle hire)

take away what you spent (in vat) from what youve taken (in vat), send the balance to HMRC

or use the FRS, another complication.......lol

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Of all the things ive lost, i miss my mind the most