Taxi Driver Online

I'm VAT registered mainly because of my other business interest in running and repairing buses for others; a bit of that is for export so zero VAT. As it stand, I claim back quite a bit every other quarter. OK, I lose a bit on the cab fares, but get back VAT on the £350-odd I pay in lease fees for the car, about £70 a month!

The mileage limit on my Skoda is 25,000, a bit too low for comfort for cab work as it's done over 19,000 since new in August. The excess mileage rate is about 5p a mile. On my previous lease car I had to pay about £1200 for the excess mileage over 2 years.

I thought much of a coach travel business is zero rtaed anyway, or is that just contract council work?

im sure the guy i used to feed using my 8 seater said all his holiday trip business was zero rated

Actually it is not quite like that. It all depends on how much you can claim back and the ratio of VAT registered customers to non VAT registered customers. In some cases businesses prefer to work with VAT registered customers. For instance if your revenue before VAT is £10,000 per month the VAT would be £2,000. However if your VAT registered customers accounted for £9,000 of the revenue, you would in effect be charging your non VAT registered customers £200 extra. Now providing that the VAT that you can reclaim is more than the £200 then you can absorb the VAT from your non VAT registered customers and not be out of pocket. Also any extra VAT that you can reclaim over the £200 is money in your pocket. Just remember that the VAT that you collect from your customers is not your money so don't spend it.

Thanks for that, it looks like it could work out and will do a bit more number crunching.

There is the flat rate VAT scheme as well. The way that this works is you just pay a fixed percentage of your revenue and you don't have to do any of the paperwork. The rate for our trade last time I looked was 10.5% so basically if you take £12,000 per month including VAT you would pay the VATMAN £1260 so providing that the VAT charged to your business customers is more than this you will be on the winning side.