Tips So Taxi Driver Accounts Do Not Have To Be Taxing
57548
Finance > Taxes
Nov 29, 2007
diyaccounting
Tips So Taxi Driver Accounts Do Not Have To Be Taxing
Taxi drivers in the UK must fill in a self assessment tax return if they have worked as a self employed taxi driver at anytime during the financial tax year. Self assessment tax returns should be filed by 30th September each year although the final deadline is the following 31st January. Failing to file the taxi accounts by 31st January attracts a 100 pounds late filing penalty with interest being charged on any tax not paid by this date. The simplest solution to preparing the taxi driver accounts is to collect all the taxi receipts and expenses together, hand them over to an accountant who will prepare your self assessment tax return and might charge between 150 to 450 pounds for the privilege. That is taxing. Taxi driver accounts does not have to be that taxing. You can prepare your taxi driver accounts and self assessment tax return yourself but do something. These taxi driver notes in preparing the taxi driver accounts and completing the self assessment tax return are to assist that process. Mileage Allowances Taxi drivers can claim as an alternative to vehicle running costs mileage allowances of 40p for the first 10,000 miles and 25p per mile thereafter. You may not claim mileage allowance and vehicle running costs. Should you choose to claim the mileage allowance then keep good records of mileage covered, purpose of journey. The DIY Accounting taxi accounting software automates this mileage allowance calculation. Taxi Capital Allowances If you bought a vehicle in the financial year 2007-08 and used the vehicle as a taxi you can claim a first year writing down tax allowance of 25% of the cost of the taxi, restricted to 3,000 pounds for vehicles costing over 12,000 pounds. On vehicles purchased in previous tax years you can claim 25% writing down allowance on the balance not yet claimed. If you have bought and sold a vehicle used as a taxi during the financial year the tax allowance is restricted to any loss made on resale and any profit made over the written down value is taxable as a balancing charge. First year allowance on non vehicle assets in the current tax year 2007-08 is 50% for small businesses. Taxis bought on Hire Purchase Claim capital allowances on the original cost of the vehicle, interest and other charges count as business expenses and go in the self assessment tax return box 3.61 Other Finance Charges Taxi Running Costs When completing the self assessment tax return taxi drivers should enter fuel costs in box 3.46 cost of sales not motoring expenses. Do not claim fuel expenses in the taxi accounts when you are on holiday, the revenue will check should they inquire into your self assessment tax return. Taxi running costs also include repairs, servicing and parts including tyres, road tax, taxi insurance and AA/RAC membership. Include radio hire and taxi office costs in general administrative expenses. Household expenses If you run your taxi business from home you can claim a proportion of household expenses as business expenses in the taxi accounts. Household expenses are likely to be disallowed unless they are either specific to the business or a specific area of your home is devoted entirely to your taxi business. Using part of a room part time would not be sufficient to include the household expenses in the taxi driver accounts. Spouse Costs You can claim expenses for partners who work for your taxi business and payments up to 100 pounds per week would not attract income tax or national insurance however any payments claimed in the taxi driver accounts must be real payments for real work done. The Revenue naturally adopt a strict view on taxi expenses claimed for partner work as it is an area some people might use to reduce the tax liability. Care is required to justify the partner as an expense. Other Expenses Enter all business expenses in a named expense box on the self assessment tax return. Avoid entries in box 3.63 Other Expenses if possible as any significant amounts in this box may give rise to an Revenue enquiry into the self assessment tax return. The best method of ensuring the taxi drivers tax bill is as low as possible in the future is undoubtedly to meticulously maintain good records of all taxi receipts and expenses and mileage covered which offers the opportunity for taxi drivers to compare the taxi running costs against mileage allowances and choose the most tax efficient option. Generally if the taxi cab capital allowances are high vehicle running costs will be the best option and if taxi cab capital allowances are low then mileage allowances may well legally increase the costs you can claim and save you money. The DIY Accounting taxi accounting software automates the comparison of taxi mileage allowances with taxi running costs doing the taxi accountants work for you.
Terry Cartwright, CEO DIY Accounting, a qualified accountant in the UK, designs Taxi Accounts software on excel spreadsheets specifically for the Taxi Driver wishing to save money and prepare the Taxi Driver Accounts and produce the self assessment tax return in the process.
send email to diyaccounting
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links at Finance > Taxes
All the states in the US, except Delaware, Alaska, Montana, Oregon and New Hampshire levy Sales and Use Tax or the SUT.
Category:
You are a smart businessman but you shouldn't be embarrassed to acknowledge that you need help when it comes to sorting your finances. If you run your own business, a tax professional would be a very big help. It is of utmost importance that you choose yo
Category:
There was a time that the person had to bring out the old receipts for the entire year and then use a pencil, a calculator and paper when preparing the federal income tax report. After double-checking the figures, the document is finalized and then filed
Category:
What are the qualifying characteristics of a dependent for tax purposes? Following is a general explanation on how to determine dependents, and how it relates to your tax status, liability and the credits you can claim on your tax
Category:
A person's intellectual property, especially copyrights, make a lot of difference while estimating the estate taxes. It is necessary to know the value of all the assets including the intellectual property to be able to find out the value of the estate.
Category:
Site Sponsor
Directory Statistics
Articles: 68252
Categories: 501
Yahoo Entertainment
