| Self employed taxi drivers in common with other | | | | driver was on holiday and examine if fuel receipts |
| self employed businesses are required to submit a | | | | had been included for this period. Not many tax |
| self assessment tax return form each year | | | | returns are enquired into as the system is based |
| reporting the main totals from the taxi drivers | | | | upon trust but taxi drivers should ensure their |
| accounts. The final submission date for these | | | | accounts do not contain this fundamental tax |
| accounts to enable the tax authorities to calculate | | | | fiddle. Taxi running costs also include repairs, |
| the tax payable is 30th September while the final | | | | servicing and parts including tyres, road tax, taxi |
| deadline for submission of the self assessment | | | | insurance and AA/RAC membership. Include radio |
| tax return is 31st January. Miss the 31st January | | | | hire and taxi office costs in general administrative |
| deadline and the penalty fine is 100 pounds. | | | | expenses. |
| The simplest solution to preparing the taxi driver | | | | Household expenses |
| accounts is to collect all the taxi receipts and | | | | If you run your taxi business from home you can |
| expenses together, hand them over to an | | | | claim a proportion of household expenses as |
| accountant who will prepare your self assessment | | | | business expenses in the taxi accounts. Household |
| tax return and might charge between 150 to 450 | | | | expenses are likely to be disallowed unless they |
| pounds for the privilege. That is taxing. Taxi driver | | | | are either specific to the business or a specific |
| accounts does not have to be that taxing. You | | | | area of your home is devoted entirely to your |
| can prepare your taxi driver accounts and self | | | | taxi business. Using part of a room part time |
| assessment tax return yourself but do something. | | | | would not be sufficient to include the household |
| These taxi driver notes in preparing the taxi | | | | expenses in the taxi driver accounts. |
| driver accounts and completing the self | | | | Spouse Costs |
| assessment tax return are to assist that process. | | | | You can claim expenses for partners who work |
| Mileage Allowances | | | | for your taxi business and payments up to 100 |
| Taxi drivers can claim as an alternative to vehicle | | | | pounds per week would not attract income tax |
| running costs mileage allowances of 40p for the | | | | or national insurance however any payments |
| first 10,000 miles and 25p per mile thereafter. You | | | | claimed in the taxi driver accounts must be real |
| may not claim mileage allowance and vehicle | | | | payments for real work done. The Revenue |
| running costs. Should you choose to claim the | | | | naturally adopt a strict view on taxi expenses |
| mileage allowance then keep good records of | | | | claimed for partner work as it is an area some |
| mileage covered, purpose of journey. | | | | people might use to reduce the tax liability. Care is |
| Taxi Capital Allowances | | | | required to justify the partner as an expense. |
| If you bought a vehicle in the financial year | | | | Other Expenses |
| 2007-08 and used the vehicle as a taxi you can | | | | Enter all business expenses in a named expense |
| claim a first year writing down tax allowance of | | | | box on the self assessment tax return. Avoid |
| 25% of the cost of the taxi, restricted to 3,000 | | | | entries in box 3.63 Other Expenses if possible as |
| pounds for vehicles costing over 12,000 pounds. | | | | any significant amounts in this box may give rise |
| On vehicles purchased in previous tax years you | | | | to an Revenue enquiry into the self assessment |
| can claim 25% writing down allowance on the | | | | tax return. |
| balance not yet claimed. Many taxis are bought | | | | The best method of ensuring the taxi drivers tax |
| and sold each year and where a taxi is sold the | | | | bill is as low as possible in the future is |
| capital tax allowance that can be claimed is the | | | | undoubtedly to meticulously maintain good records |
| difference between the written down value for | | | | of all taxi receipts and expenses and mileage |
| tax purposes and the amount of sale proceeds. | | | | covered which offers the opportunity for taxi |
| First year allowance on non vehicle assets in the | | | | drivers to compare the taxi running costs against |
| current tax year 2007-08 is 50% for small | | | | mileage allowances and choose the most tax |
| businesses. | | | | efficient option. The decision to claim mileage |
| Taxis bought on Hire Purchase | | | | allowance or taxi running costs can and often |
| Claim capital allowances on the original cost of the | | | | does change during the financial year. In general |
| vehicle, interest and other charges count as | | | | when a more expensive taxi cab is purchased |
| business expenses and go in the self assessment | | | | then the capital allowance of 3,000 pounds will |
| tax return box 3.61 Other Finance Charges | | | | often outweigh the potential mileage allowance |
| Taxi Running Costs | | | | although if the vehicle is low value the mileage |
| When completing the self assessment tax return | | | | allowance might be the best option and a method |
| taxi drivers should enter fuel costs in box 3.46 | | | | of saving valuable tax pounds which you are |
| cost of sales not motoring expenses. A standard | | | | entitled to. The best taxi accounting software will |
| check carried out by any competent inland | | | | automate the comparison of taxi mileage |
| revenue inspector enquiring into a self assessment | | | | allowances with taxi running costs doing the taxi |
| tax return would be to check when the taxi | | | | accountants work for you. |