Taxi VAT

We have a client who runs a taxi operation. They own the cars and pay for all running costs. 

 

They pay the drivers a share of the takings.

 

Say, the driver earns £1000 a week. They would say give the driver £400 and keep £600.

 

Now, as the drivers are not VAT registered they are taking that £600 and applying 20% VAT to it and paying the £120 over to the treasury.

 

Is this right or should the money be treated as received gross and then they should divide it by 6.

 

If it's 20% then it seems to be they are being unfairly penalised as they've never received the VAT.

Comments
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Flawed

neileg |

Two sides to the coin

puzzel |
puzzel's picture

Yes, this is what I think..

0098087 |

Ah but should it be all the

0098087 |

That's the point

neileg |

HMRC View

puzzel |
puzzel's picture

Sounds like rent a chair in

Fred Smith |

So just so I understand

Constantly Confused |
Constantly Confused's picture

agency

mr. mischief |
mr. mischief's picture

Regarding rent a chair; the

Fred Smith |