- Car Wash
- Fuel
- Insurance (taxi)
- Driver Taxi licence Fee
- Vehicle Taxi plate
- Repair and service
- Road Tax
- MOT (taxi, should be done every 6 month in some cities)
Thank you for your help.
Replies (24)
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Just the fuel - see the Self-employment (full) notes (2015) at
https://www.gov.uk/government/publications/self-assessment-self-employment-full-sa103f
page SEFN 5
HMRC like to check the fares to fuel ratio you see.
Whatever you want as long as consistent.
I do not bother with cost of sales with a taxi driver.
Occur
I don't have any taxi drivers who need to report cost of sale but it would never have occurred to me to post fuel anywhere but motor expenses.
Is it the sort of taxi that drives around looking for fares off the street, or the sort that sits around waiting for a pre-booked fare?
I would have thought
that for a taxi driver, cost of sales would be fuel as they need it to make sales and the fuel expenses would be related to the sales.
All the other expenses listed wouldn't be affected by sales.
There is no cost of sale
Fuel is a cost of sale for someone in the business of selling fuel. Cost of sales is not the same thing as variable costs, we wouldn't ever put in any cost of sales for a taxi driver.
As others have said though, it doesn't really matter much so long as you pick one way and are consistent with it.
Really?
So if you build houses and then sell them you don't have cost of sales because that is only for houses that you buy and sell?
Of course not
So if you build houses and then sell them you don't have cost of sales because that is only for houses that you buy and sell?
That's not the same thing at all. Fuel is never a cost of sale unless your business is a petrol station.
http://www.accountingcoach.com/blog/cost-of-sales
https://en.wikipedia.org/wiki/Cost_of_goods_sold
Both of these agree with what I said. Taxi drivers have no costs of sale because they don't sell things. How can a business with no sales have a cost of sales?
No sense
So if you build houses and then sell them you don't have cost of sales because that is only for houses that you buy and sell?
That's not the same thing at all. Fuel is never a cost of sale unless your business is a petrol station.
Both of these agree with what I said. Taxi drivers have no costs of sale because they don't sell things. How can a business with no sales have a cost of sales?
That doesn't make sense. They are selling their taxi journeys.
You seem to be thinking of a retailer.
Some of many definitions
http://www.accountingcoach.com/blog/cost-of-sales
https://en.wikipedia.org/wiki/Cost_of_goods_sold
I would treat it in exactly the same way as a haulier or courier by including the fuel in COS.
Duggimon – you are confusing cost of sales with cost of goods sold.
Not really
Duggimon – you are confusing cost of sales with cost of goods sold.
Not really, the definitions he posted are specifically of cost of goods sold which is what I was refuting with my second point. I still don't think fuel is a cost of sale though and wouldn't treat it as such but as I said initially it doesn't really matter too much.
I've done accounts for plenty of taxi drivers and a couple of haulage firms and fuel is always included in motor expenses - that's the opinion of my firm, not just me but as with so much in our profession it's open to interpretation.
Fuel for hauliers should be split.
Fuel for the commercial vehicles doing the deliveries would be a COS. Fuel for sales reps, directors etc would be an overhead.
Duggimon
I worked for a couple of oil companies.
They sold oil but they didn't buy it. They extracted it from the ground. Are you saying all the production costs should be included as overheads?
What studying have you done to be an accountant?
What experience do you have as an accountant?
Analysis paper?
So should I include the cost of analysis paper in my cost of sales?
I think NOT.
I think if you still use analysis paper you should give up accounting.
I'm talking about material expenses.
Does it matter?
Assuming turnover is under £81k, who cares?
Were turnover actually at the point where a breakdown of expenses is actually needed, box 11 is "cost of goods bought for resale or goods used" not the ambiguous "cost of sales" open to interpretation.
Accountants do like to turn a simple tax return job into an accounts job!
Obsessed
Assuming turnover is under £81k, who cares?
Were turnover actually at the point where a breakdown of expenses is actually needed, box 11 is "cost of goods bought for resale or goods used" not the ambiguous "cost of sales" open to interpretation.
Accountants do like to turn a simple tax return job into an accounts job!
I think you are getting obsessed with tax returns.
What's the £81k relevance? The VAT limit is £82k now.
I think some people are missing out on a lot of understanding.
I don't bother with accruals and prepayments when it's not material.
We have somebody here who says that some businesses don't even have any sales and therefore there's no such thing as cost of sales. Some seem to think that cost of sales doesn't exist if you haven't bought in the products you are selling.
Here's a few definitions on here that explains it reasonably well.
http://financial-dictionary.thefreedictionary.com/Cost+of+sales
It's amazing that some people don't seem to care about basic accounting theory.
SA103s - turnover less than £81k (not £82k) 14/15
2014/15 SA103s quotes that tax year's VAT reg'n limit rather than 2015/16's.
It also greatly simplifies matters (no debate on COS required!):
If your annual turnover was below £81,000 you may just put your total expenses in box 20, rather than filling in the whole section.
Tax return
I see that the OP is about a tax return. I was simply considering what was best for a set of accounts. I think gross profit aids understanding of the business.