Client is looking to purchase a taxi business. It would be advisable for the trade to be run through a limited company.
The business consists of 4 hackney carriages and 3 private hire cars. As well as hiring the vehicles to drivers, the business owner will be using a vehicle to run a taxi himself as well as, in theory, having access to any of the other vehicles.
My concern is whether there would be any company car benefit attributable to him.
Does anyone have any thoughts/advice they can offer?
Thanks
Replies (6)
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Plated Taxis
As far as I remember plated taxis are not allowed to operate on the road in a private capacity and therefore a company car benefit could not arise. You should investigate this angle first for the up to date rules which may provide a simple solution to your query.
Keep private use to 1 vehicle only & own it personally
A possible solution regarding vehicles that might be liable to car BIK is to choose one such vehicle and make that this this one vehicle is:-
(a) The only vehicle with private use
(b) Its costs do NOT go through the business
(c) It remains owned personally
Then record business mileages of this one vehicle and the employee (director) be reimbursed FPCS mileage. Employer (company) then uses the mileage record (alongside data as to fuel type / engine size) to recover business mileage fuel input tax.
The above covers the income tax and VAT angle, but does NOT address any taxi / private hire licensing issues.
Phone the licencing authority
A possible solution regarding vehicles that might be liable to car BIK is to choose one such vehicle and make that this this one vehicle is:-
(a) The only vehicle with private use
(b) Its costs do NOT go through the business
(c) It remains owned personally
Then record business mileages of this one vehicle and the employee (director) be reimbursed FPCS mileage. Employer (company) then uses the mileage record (alongside data as to fuel type / engine size) to recover business mileage fuiel input tax.
The above covers the income tax amnd VAT angle, but dies NOT address any taxi / private hire licensing issues.
My wife, her daughter and I have a small minicab business which is a partnership and we have had regular inspections and have to show various documents and there has not been a problem but it could be different if a limited company is involved but I would phone the licencing authority and check.
Many taxi firms...
.... are in a dire position because there so many extra taxi's and yet a decreasing number of people with the money to hire a taxi. I would keenly question the viability to the business, especially since it isn't large, up for sale.
Taxi businesses
We started the business a few years ago and it took off until the recession. Now we are just waiting for the recession to end. Luckily the business is run from home with my wife the main driver and so there are very little overheads. She also has a loyal client base but less businesses send staff overseas and airport runs are the majority of her business.
A lot of taxi firms make their profits by hiring cars and radios to drivers because there's a lot of people desperate for work. I can't see the drivers making much money though.
Spot on!
"A lot of taxi firms make their profits by hiring cars and radios to drivers because there's a lot of people desperate for work. I can't see the drivers making much money though."
The drivers don't but the bigger firms who operate such a scheme do.