This month I have been dealing a great deal with chauffeur trading models and their effect on VAT. It seems that for many in the Private Hire and chauffeur world, planning is a dirty word (I say many but thankfully not all). We can’t really go in to too much detail here because everyone and every company has a different view to trading.
However, a full service chauffeur company or a commission only agency are two very different animals and it is very important when starting up, growing your business or acquiring a new business that you are aware of how HMRC looks at you. The truth is you can’t have your cake and eat it. Here are my pointers for a simpler life …
- Be consistent in how you collect and pay your money from your customers and to your drivers respectively
- Decide who your clients are. For example; agencies’ clients are the drivers whilst a chauffeur company serves its corporate account clients.
- Think about what makes you competitive. If you are a high end chauffeur company and 20% VAT makes a huge difference to your competitive advantage, something is probably amiss with your business model.
- Finally, plan, plan, plan. Talk to your accountant about the type of market you want to trade in and the company you want to become and let them help you put safeguards and compliance in place.
By the way, the above is my opinion and cannot be relied upon as advice without (you’ve guessed it) taking advice from a professional who knows your business.
Anyway, here is your regular update of what’s important and funky in the world of tax and accounting.
HMRC published a guide on 2nd April 2015 to help employers check a National Insurance number is genuine. Many different suppliers of commercial payroll software provide this functionality as standard however the guidance published by HMRC can be used by employers that do not have this facility.
A National Insurance Number Verification Request (NVR) can be sent to verify or obtain new employees’ National Insurance numbers. An NVR request can only be sent once two weeks have passed after and employer’s first FPS has been sent using payroll software.
Note, this process is not relevant if an employee does not have a National Insurance number. HMRC is unable to assist with requests for new National Insurance numbers, which should be requested from Job Centre Plus (by the employee themselves).