Tom Thumb wrote:
I would say the basics are that if you employ drivers or provide them with cars on a split fare basis then you are likely to have to charge VAT. However if you have an agreement where you are simply acting as an agent for the owner drivers and invoicing account work on their behalf then you may get away with exemption. However you must then charge VAT on you fees to the drivers.
Who wants to disagree, please feel free.
Yes, I would agree in general terms, of course it would depend on being over the VAT threshold - in my manor, for example, there are a few people who run a handful of cars but won't expand so to ensure they keep below the VAT threshold.
As for the agency concept, again in my manor I think that the VAT aspect was a major factor in moving from company-owned vehicles to an agency agreement - if each individual only runs one or two cars then this keeps the fares out of the ambit of VAT.
I think there are people running three or four cars in my manor without being VAT registered. Since the VAT threshold is £65k turnover this may surprise some of you, but don't ask me how they get away with it!!
Dusty