What is Taxi Manager?

Taximanager has been developed to deliver a simple to use and comprehensive solution that will meet the majority of every day needs for a Hackney, private hire or UBER taxi driver, whether a Driver or Owner Driver. More »

Mobile friendly app

The web based application (APP) can be accessed either from a computer, tablet and smartphone. More »

Accountancy for Taxi Drivers

Perfect for your self assessment, or pass onto your accountant or go PRO with us and we will act as your accountants More »

 

HMRC to carry out tax checks on taxi licence renewals

Individuals applying for public sector licenses in sectors such as scrap metal and private hire vehicles will need to provide proof that they are correctly registered for tax when renewing their licenses

 

The government is planning to introduce a ‘tax registration check’ linked to licence renewal application processes in the public sector to make it difficult for individuals to operate in the hidden economy.

HMRC will introduce legislation applying conditionality in the taxis and private hire vehicles (PHVs) sector, the waste sector and the scrap metal trade.

HMRC is planning to carry out these tax registration checks by developing a digital service which would allow applicants to demonstrate their tax-registration status to a licensing authority. One option would be for applicants to generate evidence through their digital tax account and transfer it securely to a licensing authority. The government believes this would also ensure simplicity for licensing authorities and reduce the need for HMRC to obtain data from licensing authorities to check evidence provided by applicants.

The following rules will apply when carrying out these tax checks:

  • New applicants should be signposted towards tax obligations and HMRC services but no firm checks should be needed, as people applying for licences for the first time may not have been trading long enough to be required to register for tax;
  • Tax-registration checks should apply to those renewing licences, as returning applicants are likely to have been trading long enough to be obligated to register for tax;
  • Tax registration checks should require applicants to submit appropriate proof that they are registered for tax, or to declare that they do not need to be registered;
  • There should be no requirement upon licensing authorities to carry out more detailed tax checks when licence renewals take place, beyond confirming the tax-registration status of an applicant.

The hidden economy refers to individuals and businesses with sources of taxable activity that are hidden from HMRC. The hidden economy tax gap is estimated at £3.2 billion for 2016-17.

It therefore seems pure commonsense to take advantage of our excellent service whereby we will register all new PRO & PRO+ clients with HMRC free of charge

Digital tax, Self employment, the Taxi Driver and Taximanager

When we first thought about our web app Taximanager back in 2010, one of the main considerations was to produce a ‘real time’ opportunity for a driver to be able to record their business income and expenses whilst on the go. We also wanted to assist the driver in being able to budget for any impending tax and national insurance bill.
This idea was born in 2010 and here we are now facing what HMRC are referring to as digital taxation. Did we have good foresight, or were we pre-empting what was likely to be around the corner.
Whilst it is early days in the delivery from HMRC as to what this will mean, there is a belief that tax and nic for the self-employed will have to be paid probably on a quarterly basis and also there could be the need to deliver information of earnings (profit) on a more regular basis.

So our message is simply, be prepared and get ready!
Many of our drivers use the system as it was designed, and either complete in real time i.e. on a daily basis or regularly update their records so that they are never more than a few weeks or a month behind.
Conversely we also have users who actually play ‘catch up’ after the year in question, whilst not ideal, this still allows them to provide the information in time for the submission of their self-assessment return without receiving any penalties. The down side of this, is really the fact that the final tax/nic liability is not known until almost at the filing date which is 31 January following each year end fifth of April. Any liabilities have to be paid by 31 January also.
As long as you have budgeted, this is not really a problem, but for many, it is the first time that they actually see what their tax liability is. As discussed in previous blogs we also have the ‘payment on account’ to consider which when it is applicable, can catch people by surprise.
With digital tax around the corner we at Taximanager feel that this is an ideal opportunity for drivers to change their way of thinking. Record your information in real time and get into the habit of keeping your information up to date as this will be a mandatory process to be done in future, especially if HMRC are wanting payment of tax liabilities on a quarterly basis.
Preparation is the key, all we can do at Taximanager is try to stress that there is a very important change around the corner. This is your opportunity to get into the habit of recording your information so that when it becomes a  mandatory requirement in future, you will be better prepared for the digital tax system.
We will inevitably need to make some changes to our system in due course once we are fully aware of our clients needs.
Kind regards
Paul Taylor
PBT Tax Solutions

Budgeting for your tax bill

For most of us 31 January is that dreaded deadline for getting your self assessment filed to avoid penalties.

Many people tend to have a habit of leaving the submission of the return to the last minute, or providing their accountants with the required information, but with it can often come with a shock! Yes the dreaded bill.

This year saw the inclusion of class 2 NIC  along with the normal collection of any class 4 NIC and tax. When leaving everything to the last minute, many haven’t a clue what their self assessment liability is likely to be. Furthermore for those in the early years of self assessment there is the added payment on account that effectively means that for the first time you could be paying one and a half times the amount due, as do not forget if you started work say on 1 May 2016 your first tax bill is not due until 31 January 2018. This is why HMRC say if your tax bill is over £1000 for 2016-17 then they want a payment on account for 2017-18 paying in January 2018 and once again in July 2018.

That is why we introduced a rolling tax screen in Taximanager to help our users budget towards their tax bill, but this really is only of any use to those making entries on the go, or in real time as it is referred to these days. Playing catch up like some do, loses this excellent facility.

Being self employed is all about discipline, when it comes to tax. If you don’t set it on oneside then you can be shocked by the amount you maybe asked to pay. Many who fall foul to this feel they spend the rest of their self employed working life, playing catch up to pay the taxman. We at Taximanager do not have a magic wand to pay your tax, all we can do is provide you with a system to follow.

There is a link below to a youtube video produced by  HMRC which you may find interesting and helpful.It is worth watching.

You can always set up a direct debit, to pay your tax in advance weekly/monthly etc, this as stated is for advance payments, not arrears. Please see the link below, it will also show you how to set up an online account to do this.

https://www.gov.uk/pay-tax-direct-debit

 

 

UBER drivers do not pay tax

Well following on from yesterdays tribunal decision that Uber drivers should become employess, this has opened the flood gates of debate, along with the expected derogatory comments made towards the Uber organisation and drivers.

To cap it all, Iain Duncan Smith is claiming that Uber drivers do not pay tax. So where has he got that gem of a statistic from? So is he saying all black cab and other private hire drivers, who incidentally a lot still operate mainly on a cash only basis, pay all the correct taxes?

Listen to him here

http://www.lbc.co.uk/politics/parties/conservatives/iain-duncan-smith-launches-attack-on-uber/

Uber drivers get paid as we know, once a week direct into their bank account. Their gross income is never in doubt.

We find that a lot of our Uber driver clients, are administratively on the ball, register with HMRC immediately and take advice from us as to what they can claim, and budget using our software for eventual tax and national insurance liabilities.

Whatever the outcome after the appeal(s) the drivers will still need to submit claims to cover their vehicle and operating costs, mobile phone and licencing expenditure, almost the same as being self employed.

Can I claim the cost of meals and clothing against my taxable profits?

Can I claim the expenses of a meal whilst working / Can I claim for clothing?

A regular question that is often asked is can I claim expenses in respect of meals.
We are aware that some accountancy practices are recommending that the cost of meals if a receipt is obtained, can be claimed against your profit.

It is our opinion that this is not always correct.

We contacted HMRC recently and the question was asked as to whether this was a legitimate expense.
We believe that the claiming of expenses in respect of meals taken will be regarded as inadmissible, particularly if it is claimed on a regular basis.

If HMRC decided to review or launch an enquiry into your self assessment return, they will review every expense claimed. Besides looking at receipts to prove the expense was incurred, they will look to see if the cost is justifiable and allowable.

However again it is our understanding that to claim expenses on a regular basis is dependent on the reason for the claim.

Tax law can be very misleading and there can be grey areas which are open to interpretation. For those interested in tax cases there are some facts from those the cases detailed below.

So, if a taxi driver is operating in what can be described as their local area which again is not that easy to define, but say for example most of the journeys are no more than 1 to 2 hours return journey time or under that timescale, then there is no justification for claiming for meals taken in that typical day.

If for example a journey exceeded five hours, and say in multiple five hours, ten or even fifteen hours which would be exceptional, then the receipted cost of a meal(s) taken we believe would be acceptable to claim.

A record of this exceptional need to claim for a meal as you are operating out of your normal area ( eg London to Manchester trip) should be maintained with specific information recorded and one would expect the receipt would show the purchase of a meal away from your normal operating area. Don’t forget that as a private hire driver all of your journeys are recorded so HMRC would have the opportunity to check that any claim is justifiable against the logged trip made.

Clothing would only be allowable, if the operator you are working for stipulates clothing with a company logo on has to be worn. The nominal cost of cleaning that clothing say £2 a week would be admissible.

We know that this is a controversial subject and would advise that anyone who queries this should themselves contact HMRC for confirmation that this procedure is correct.

Don’t forget that where a self assessment return is seen to be incorrect and the amount of tax/national insurance has been underpaid as a result of an incorrect expenses claim, then HMRC will pursue the lost tax national insurance and will also charge interest and additional penalties.

So BEWARE, don’t just believe what someone else has told you.

Feel free to contact HMRC yourself for their opinion, they are there to assist and help everyone.

The telephone number is; 0300 200 3310

We hope that this explanation is of assistance, not something everyone wants to hear, but  we are only trying to protect our clients.
Paul Taylor
PBT tax solutions
Acting for Taximanager.co.uk

The Carpenter’s Lunch – Subsistence Expenses for the Self-Employed

 

Mr Quinn was an itinerant carpenter who worked on numerous building sites. It was not possible for him to go home for lunch so he claimed to deduct the extra cost of the lunch he bought for himself at wherever he was working – he estimated the cost was 40p, as compared to the cost of a lunch at home of 10p – this all took place in 1975 – so he claimed the 30p difference.

 

Mr Quinn’s tax inspector, who rejoiced in the name of Caillebotte, did not agree and he disallowed the claim. In order to be deductible, an expense must be incurred “wholly and exclusively” for the purposes of the business, and as we all have to eat in order to live, you cannot separate out a part of the cost of the food and call it a business expense, said Mr Caillebotte.

Mr Quinn went to court about this, and lost. Subsistence expenses are one of a number of costs that a self-employed person cannot deduct because of this “duality of purpose”.

The other famous case involved the barrister, Baroness Mallalieu, who lost her claim to deduct the cost of her court clothes – the wig and gown were OK, but the normal smart business clothes she wore underneath were not, even though the court accepted that she did not like a formal style of dress and only wore the clothes in court.

Just as we have to eat in order to live, we wear clothes for “warmth and decency” as well as for the requirements of our profession. Uniforms and protective clothing are allowable, but ordinary civilian clothing is not.

HMRC are not quite as harsh about subsistence as Caillebotte v Quinn would let them be. They do allow the cost of food and drink, provided it is “reasonable”, in two situations:

The Trade is Itinerant
Where it is part of the very nature of the business to travel, the cost of subsistence and accommodation while travelling is allowable. An example could be a self-employed travelling salesman, or a taxi driver.

 

The Journey is “Outside the Normal Pattern”
Those of us who are self-employed and have a base from which we normally work – home for some, an office or workshop for others – can only claim the cost of subsistence if we make a journey that is outside the normal pattern of our business activities.

TAX refund £432 is going begging Do not lose out!

Marriage Allowance

Basically you can use unused personal allowances of your spouse or partner, to obtain a tax refund 2015-16 £212; 2016-17 £220 that is a whopping £432. If your partner doesn’t work of earns less than £11,000 you can get up to £432. You can back date your claim to 6 April 2015.

So don’t miss out

You can obtain this online on this link

https://www.gov.uk/marriage-allowance/how-it-works

or phone 0300 200 3300 if you are having any problems doing this online.

Please note we at Taximanager cannot do this for you, but just do not want you to miss out.

How it works

Marriage Allowance lets you transfer £1,100 of your Personal Allowance to your husband, wife or civil partner – if they earn more than you.

This reduces their tax by up to £220 in the tax year (6 April to 5 April the next year).

To benefit as a couple, you (as the lower earner) must have an income of £11,000 or less. You can calculate how much tax you’ll pay as a couple.

If you were eligible for Marriage Allowance in the 2015 to 2016 tax year, you can backdate your claim to 6 April 2015. You can only transfer the set amount each year.

Who can apply

You can get Marriage Allowance if all the following apply:

  • you’re married or in a civil partnership
  • you don’t earn anything or your income is under £11,000
  • your partner’s income is between £11,001 and £43,000

You can still apply for Marriage Allowance if you or your partner:

  • are currently receiving a pension
  • live abroad – as long as you get a Personal Allowance.

If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.

Happy New Tax Return 2016-17

Happy New Tax Return 2016-17

Self assessment 2015-16 – get ready to update so we can submit
Self assessment 2016-17 – Make life easy – RECord your entries NOW!!

Dear Taximanager user/PRO clients and all registered interested parties

First of all, we at Taximanager wish to thank all of our long standing users, in this our sixth year for your continued custom. Those of you who have been with us from the beginning know how easy it is to look back at all of your previous years entries whenever you want to, sometimes only just to make comparisons between this and past years accounts.

2016-17

Well this last Wednesday 6 April 2016 marked the beginning of the new tax year, so why not celebrate and make life easier for yourselves.There is a saying only handle a piece of paper once, so why not immediately start to record your entries for 2016-17 straight onto your Taximanager account. Dont forget that it is saved in the cloud so your records are safe and secure.

2015-16

Since 6 April 2016, we are now able to submit your self assessment return, once all of your entries and details where applicable such as other income etc have been provided.

We will send out additional guidance over the next few weeks to help with the finalisation process.

Our recommendation is now you have purchased Taximanager you might as well update your entries now, so the process of submitting your return can commence. This way you will know the correct figure for your self assessment return, and know what tax liability you have to pay by 31 January 2017. Also if for some reason your profit in this year is less than the previous year, this may reduce any payments on account payable.

2015-16-play catch up

Even if you have not registered or bought our 2015-16 you can still buy for this year and you can still complete your entries historically to enable you to have figures ready for your 2015-16 self assessment return, or for us to submit your return if you go PRO.

It is all as simple as that.

As always we are here to answer your questions, and still provide a personal service.

Taxi driver can claim Married Couples Allowance and save up to £212 tax

Save £212 tax – Do you as a taxi driver qualify?

Married couples and those in civil partnerships can now register for a tax break, which could help them save up to £212 a year.

 

From 6 April, more than four million married couples and 15,000 civil partners who earn less than the £10,600 income tax personal allowance for 2015/16 will be able to transfer £1,060 of their allowance to their spouse, so long as the recipient doesn’t pay higher rate (40%) or additional rate (45%) tax.

This also applies where a higher earner is self-employed and it means that together, a couple will pay less tax.

 

The plans were first announced by Prime Minister David Cameron in 2013 and published in the Budget 2014. But while they don’t come into force until 6 April, from today couples can register their interest online via the marriage allowance site.

Anyone registered will then be contacted by HM Revenue and Customs (HMRC) in April to ask whether they want to apply.

How it works

Marriage allowance lets you transfer £1060 of your personal allowance to your husband,wife or civil partner.

This reduces their tax bill by up to £212 in the tax year (6 April to 5 April the next year).

To benefit as a couple, you – as lower earner – need to have an income of £10.600 or less.

People can register at any point in the tax year and will still receive the full benefit of the allowance.

Follow this link and apply now.

https://www.gov.uk/marriage-allowance

Buying a taxi- Think emissions

Many drivers out there are wondering about their next private hire taxi car purchase.

Well it all comes down to capital allowances for taxi vehicles

There are many considerations like reliability, comfort, economy and customer appeal.

We have noticed that a lot of Uber taxi drivers seem to favour the hybrid car for taxi use. This is possibly due to the economy, comfort for passengers and ease of drive around many of our cities.

But do not forget to consider the capital/first year allowances you can claim against your taxable profits. HMRC have set the amounts you can claim by way of % to the emission of the vehicle.

So for 2015/16 the rates are:

New or unused cars under 75g/km or less (or the car is electric) – you can claim First Year Allowance which is the whole cost of the car against your profit

New or unused cars between 75g/km and under 130g/km you can claim 18% of the capital cost against your profit

Second hand, CO2 emissions are 130g/km or less (or car is electric) you can claim 18%

Over 130g/km you can claim only 8%.

So choose wisely.

 

HMRC penalties for late Self Assessments

We at Taximanager are proud to be able to announce that all of our clients tax returns were sent in on time, despite some last minute entries.

With an accountancy fee of only £79, when there is a manadatory £100 penalty for sending your return in late, it does not make sense why taxi drivers are not making use of this greast webAPP. We welcome a lot of UBER taxi drivers who have joined recently.

The whole idea is for taxi and private hire drivers to make regular entries of recording income and expenses as often as they can. The system is there to use, and gives an immediate up to date profit & loss account.

There are probably taxi drivers out there who still may not have sent in their return, but unfortunately HMRC will not go away and they will charge penalties.

An example is someone who does not submit their 2015 return until 12 June 2016 will get charged £530 even if they owe nothing.

There is still opportunity for drivers to purchase our Taximanager 2015 PRO package and as soon as the entries have been made we can submit the return to help minimise penalties.

Act now or pay a heavy price later!